QUESTION 2:

Consider the following information of Bluetooth Bhd:

Bluetooth Bhd
Income Statement for year ended 31/12/2022
Net Sales	102000
Cost of Goods Sold	(7000)
Gross Profits	95000
Operating expenses	(1000)
Depreciation Expense	(19000)
Earnings before interest and tax (EBIT)	75000
Interest expense	(20000)
Earnings before tax	55000
Taxes (30%)	(16500)
Profit after tax	38500

Bluetooth Bhd
Balance Sheet as at 31/12/2012
Current Assets		Current Liabilities
Cash	20,000	Account Payable	32,500
Marketable Securities	22,300	Notes Payable	10,000
Accounts Receivable	4,100	Accruals	60,000
Closing Inventories	30,000	Total Current Liabilities	102,500
Total Current Assets	76,400	Long Term Debt	30,000
Net Fixed Assets	100,000	Total Liabilities	132,500
Total Assets	176,400	Shareholders' equity
		Capital	43,900
		Total liabilities and shareholders' equity	176,400

You are required to compute and interpret the following ratios:

a) Current ratio

(2)

b) Acid test ratio

(2)

c) Inventory turnover

(2)

d) Average collection period

(2)

e) Fixed asset turnover

(2)

f) Debt ratio

(2)

g) Gross profit margin

(2)

h) Return on asset

(2)

i) Return on equity

(2)

j) Net profit margin

(2)