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

Extract of the Statement of Financial Position as at 31 December 2023

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)

\begin{tabular}{|l|c|} \hline & R \\ \hline Sales & 1360000 \\ \hline Cost of Sales & (850000) \\ \hline Gross Profit & 510000 \\ \hline Operating Profit & 306000 \\ \hline Interest Expense & (34000) \\ \hline Profit before tax & 272000 \\ \hline Net Profit after tax & 195840 \\ \hline \end{tabular} \begin{tabular}{|l|c|} \hline & R \\ \hline Assets & 1615000 \\ \hline Non- current assets & 1113500 \\ \hline Current assets (Includes inventory of R332 000) & \\ \hline Equity and liabilities & 2000000 \\ \hline Ordinary share capital (500000 shares) & 99500 \\ \hline Retained earnings & 340000 \\ \hline Non- current liabilities & 289000 \\ \hline Current liabilities & \\ \hline \end{tabular}