Question 2 (30 marks)

The following information relates to Delta Limited, a private equity company:

Delta Limited

Summary Profit and Loss Account

For the Year Ended

31 December 2022

	000s	000s
Sales		720
Cost of Sales		360
Gross Profit		360
Wages and Salaries	160
Depreciation	40
Other Operating Expenses	120
		320
Net Profit		40

Delta Limited

Summary Balance Sheet

As at 31 December 2022

	000s	000s
Fixed Assets at NBV		360
Current Assets
Stocks (Inventory)	60
Debtors (Receivables)	150
Cash	20
	230
Current Liabilities
Creditors (Payables)	90
Working Capital		140
Net Assets		500
Share Capital and Reserves		500

Required:

Calculate the following ratios explaining briefly the meaning of each one:

Current Ratio

Quick Ratio

Stock Turnover Period

Debtors Turnover Period

Creditors Turnover Period.