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QUESTION 2 ( 2 0 Marks ) REQUIRED 2 . 1 Use the information provided below to calculate the ratios for 2 0 2 2
QUESTION Marks
REQUIRED
Use the information provided below to calculate the ratios for expressed to two decimal places
that would reflect each of the following. Note: Use the formulas provided in the formula sheet only that
appear after QUESTION
The efficiency with which the company can produce and sell its products before
extraneous costs are deducted. marks
The amount of time taken by the company to pay its trade debts. marks
A measurement of the ability of management to use the companys net assets to generate
sales revenue. marks
The amount of profit that the company generates in relation to its equity and borrowed
capital. marks
The portion of the company's profit that is allocated to each outstanding ordinary share. marks
The percentage of the profit that has been put back into the company. marks
Comment on the following ratios by stating TWO significant points in each case:
Profit margin Net profit margin marks
Price earnings ratio times times marks
Return on assets marks
Debt to assets marks
INFORMATION
Excerpts of the financial data of Premier Limited for are as follows:
STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED DECEMBER
R
Sales
Cost of sales
Operating profit
Interest expense
Profit before tax
Company tax
STATEMENT OF FINANCIAL POSITION AS AT DECEMBER
R
Assets
Noncurrent assets
Inventories
Accounts receivable
Cash
Equity and liabilities
Ordinary share capital shares
Retained earnings
Longterm loan
Accounts payable
Dividends payable
Additional information
All purchases and sales of inventory are on credit.
Inventories amounted to R on December
Interim dividends paid on July amounted to R
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