QUESTION $2$STATEMENT OF FINANCIAL POSITION AS AT $31$ DECEMBER $2022$

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$(20$ Marks$)$

REQUIRED

$2\mathrm{.}1$ Use the information provided below to calculate the ratios for $2022($expressed to two decimal places$)$

that would reflect each of the following:

$2\mathrm{.}1\mathrm{.}1$ The profit of the company relative to sales after deducting the cost of sales.

$(2$ marks$)$

$2\mathrm{.}1\mathrm{.}2$ The ability of the company to profitably utilize its capital, which includes both debt and

equity.

$(2$ marks$)$

$2\mathrm{.}1\mathrm{.}3$ The proportion of the total assets that are financed by total debt.

$(2$ marks$)$

$2\mathrm{.}1\mathrm{.}4$ The ability of the company to repay its short$-$term debts under distress conditions, on the

assumption that inventories would have no value at all.

$(2$ marks$)$

$2\mathrm{.}1\mathrm{.}5$ The portion of the company's profit that is allocated to each outstanding ordinary share.

$(2$ marks$)$

$2\mathrm{.}1\mathrm{.}6$ An indication of the percentage of profit that has been put back into the company.

$(2$ marks$)$

$2\mathrm{.}2$ Comment on the following ratios that have been calculated for Sapphire Ltd:

$2\mathrm{.}2\mathrm{.}1$ Profit margin

$(4$ marks$)$

$2\mathrm{.}2\mathrm{.}2$ Return on equity

INFORMATION

Excerpts of the financial data of Sapphire Ltd for $2022$ are as follows:

STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED $31$ DECEMBER $2022$