QUESTION 4 (20 Marks) REQUIRED 4.1 Calculate the following ratios for 2022 (expressed to two decimal places). Note: Use the formulas provided in the formula sheet only (that appear after QUESTION 5). 4.1.1 Gross profit margin (2 marks) 4.1.2 Net profit margin (2 marks) 4.1.3 Inventory turnover (2 marks) 4.1.4 Current ratio (2 marks) 4.1.5 Acid test ratio (2 marks) 4.1.6 Debt-equity ratio (2 marks) 4.1.7 Dividend yield (2 marks) 4.2 Comment on the following ratios:

INFORMATION Extracts of the financial statements of Spire Limited for 2022 are given below.

Additional information Inventories amounted to R301 000 on 31 December 2021. Dividends paid during 2022 amounted to R187 500. The authorised share capital consisted of 1 000 000 ordinary shares of which 750 000 were issued. The market price of the share was R3 on 31 December 2022. Credit terms to debtors are 30 days.

\begin{tabular}{|l|c|c|} \hline & 2022 & 2021 \\ \hline Debt to asset ratio & 27.26% & 40.34% \\ \hline Debtors collection period & 36.87 days & 25.62 days \\ \hline Return on equity & 11.67% & 14.25% \\ \hline \end{tabular} \begin{tabular}{|l|r|r|} \hline \multicolumn{1}{|l|}{ STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2022} & \\ \hline \multicolumn{1}{|l|}{R} & 2970000 \\ \hline Sales & 1980000 \\ \hline Cost of sales & 363000 \\ \hline Operating profit & 33000 \\ \hline Interest expense & 330000 \\ \hline Profit before tax & \\ \hline Company tax & 99000 \\ \hline \end{tabular} STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2022 \begin{tabular}{|l|r|r|} \hline Non-current assets & & \\ \hline Inventories & 2029000 \\ \hline Accounts receivable & 383000 \\ \hline Cash & 300000 \\ \hline Ordinary share capital & 10000 \\ \hline Retained earnings & 1500000 \\ \hline Non-current liabilities & 480000 \\ \hline Accounts payable & 495000 \\ \hline Bank overdraft & 200000 \\ \hline 47000 \\ \hline \end{tabular}