Question 3 [35 Marks] Merit is a Company that operates in the Retail business and has a 30 June 2021 year end. The Books of Merit private limited are as follows:

Additional Information

1. Opening Inventory was R 325 000

2. A year has 360 days

Required Calculate the following ratios, Answer ALL questions. [35 Marks]

1. Gross profit ratio (2 marks)

2. Inventory turnover ratio (3 marks)

3. Operating ratio (5 marks)

4. Current ratio (3 marks)

5. Liquidity ratio (3 marks)

6. Debtors/Receivables ratio (4 marks)

7. Creditors/Payables ratio (4 marks)

8. Proprietary/Shareholders to Total assets ratio (3 marks)

9. Rate of return on net capital employed (2 marks)

10. Rate of return on equity shares (3 marks)

11. Days supply (Inventory) on hand (3 marks)

Statement of Profit or loss and other comprehensive income as at 30 June 2021 R Sales Cost of Sales Gross Profit Office expenses (Including interest on debentures) Selling expenses Profit before Tax Tax Net Profit 1 500 000 (750 000) 750 000 (125 000) (125 000) 500 000 (250 000) 250 000 Statement of Financial Position as at 30 June 2021 R Assets Fixed Assets Inventory Trade Receivables Bills Receivables Cash Intangible Assets 5 500 000 175 000 350 000 50 000 225 000 100 000 Total Assets 6 400 000 Equity and Liabilities Share Capital 10% Preference shares Retained Earnings 10% Debentures Trade Payables Bank Overdraft 2 000 000 2000 000 1 100 000 1 000 000 100 000 150 000 Bills Payables Outstanding Expenses 45 000 5 000 Total Equity and Liabilities 6 400 000