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

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

RSales1 360 000Cost of Sales(850 000)Gross Profit510 000Operating Profit306 000Interest Expense(34 000)Profit before tax272 000 Net Profit after tax195 840

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

RAssets Non- current assets1 615 000Current assets (Includes inventory of R332 000)1 113 500Equity and liabilities Ordinary share capital (500000 shares)2 000 000Retained earnings99 500Non- current liabilities340 000Current liabilities289 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