QUESTION 5 REQUIRED Calculate the following ratios for 2022 and in each case state whether there has been an improvement or deterioration in the ratio. Express the answers to the ratios to two decimal places. The ratios for 2021 are provided in brackets. 5.1 5.2 5.3 5.4 5.5 5.6 5.7 Gross profit margin (2021: 40.51%) Trade payables average number of days (2021: 29.72days) Return on capital employed (2021: 24.62%) Current ratio (2021: 1.78:1) Acid test ratio (2021: 0.92:1) Debt to equity ratio (2021: 69.37%) Inventory average number of days (2021: 73.89 days) INFORMATION Extracts of the financial statements of Axar Limited as at 31 December 2022 are as follows: Sales (all credit) Cost of sales Operating profit/Profit before interest and tax Interest expense Profit before tax Company tax Non-current assets Current assets Shareholders' equity Non-current liabilities Current liabilities Note: Current assets include the following: Inventory 1 Current liabilities include the following: Trade payables 31 December 2022 R110 000 (20 Marks) 31 December 2022 R90 000 (3 marks) (3 marks) (3 marks) (3 marks) (3 marks) (2 marks) (3 marks) R 1 200 000 800 000 263 000 20 000 243 000 68 000 1 000 000 380 000 950 000 270 000 160 000 31 December 2021 R80 000 31 December 2021 R70 000 Credit purchases for the year ended 31 December 2022 amounted to R830 000. Credit terms from suppliers are 30 days.