QUESTION 2 (20 MARKS)

2.1 REQUIRED Calculate the ratios for 2022 only that reflect the following. Express the answers to two decimal places.

2.1.1 The amount of the net income generated as a percentage of the revenue. (2 marks)

2.1.2 A measure the company's ability to pay its short-term obligations using all the assets that can be converted into cash within a year. (2 marks)

2.1.3 The amount of time taken by the company to collect the trade debts. (2 marks)

2.1.4 The time during which trade payables remain outstanding. (2 marks)

2.1.5 A measure of the efficiency of the company's net assets in generating revenue. (2 marks)

INFORMATION Extracts of the financial statements of Supreme Limited are provided below: SUPREME LIMITED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2022 R Cost of sales 2 400 000 Gross profit 1 440 000 Operating profit 684 000 Profit before tax 600 000 Profit after tax 420 000 STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER: 2022 (R) 2021 (R) Non-current assets 825 000 950 000 Inventories 1 145 000 630 000 Trade and other receivables (Accounts receivable only) 380 000 330 000 Cash and cash equivalents 55 000 70 000 Shareholders equity 1 650 000 1 150 000 Non-current liabilities 500 000 700 000 Current liabilities (Accounts payable only) 255 000 130 000 Note: Eighty percent (80%) of the sales is on credit. Fifty percent (50%) of the purchases of inventory is on credit.