QUESTION 3 (25 Marks) Extracts of the financial statements of HP Limited for 2023 are given below. INFORMATION HP Limited Extract of the Statement of Comprehensive Income for the year ended 31 December 2023 R Sales 1 360 000 Cost of Sales (850 000) Gross Profit 510 000 Operating Profit 306 000 Interest Expense (34 000) Profit before tax 272 000 Net Profit after tax 195 840 Extract of the Statement of Financial Position as at 31 December 2023 R Assets Non- current assets 1 615 000 Current assets (Includes inventory of R332 000) 1 113 500 Equity and liabilities Ordinary share capital (500000 shares) 2 000 000 Retained earnings 99 500 Non- current liabilities 340 000 Current liabilities 289 000 Required: Calculate the following ratios for 2023. Where applicable, round off answers to two decimal places: 3.1 Operating profit on turnover (5) 3.2 Current ratio (5 ) 3.3 Acid test ratio (5) 3.4 Interest cover (5) 3.5 Return on assets ( 5 ) QUESTION 4 (25 Marks) 4.1 You want to begin saving for your daughter's college education and you estimate that she will need R240 000 in (6) 17 years. If you feel confident that you can earn 7.5% per year, how much do you need to invest today? 4.2 Suppose your company expects to increase unit sales of widgets by 14% per year for the next 8 years. If you (6) currently sell 2.5 million widgets in one year, how many widgets do you expect to sell in 6 years? 4.3 You are looking at an investment that will pay R1 800 in 3 years if you invest R400 today. What is the implied