QUESTION FOUR [25] The following information appeared in the financial statements of Neli Projects Ltd for 2021: Statement of Financial Position: R R 2021 2020 Assets Non-Current/Fixed 4 200 000 3 000 000 Inventory 400 000 600 000 Receivables 1 550 000 1 200 000 Cash 600 000 300 000 6 750 000 5 100 000 Equity and Liabilities Share Capital (R2 shares) 4 200 000 4 000 000 Retained Income 600 000 300 000 Long term Debt 250 000 200 000 Payables 1 700 000 600 000 6 750 000 5 100 000 Statement of Comprehensive Income: R 2021 Revenue (10% on credit) 10 200 000 Direct costs (80% on credit) 4 080 000 Expenses 3 200 000 Net Income after Tax 2 000 000 Dividends 1 700 000 Retained Income 3 000 000 Note: Shares are currently trading at R2, 80 per share. Required:

4.1 Calculate the net profit on turnover for 2021. (2)

4.2 Calculate the earnings yield and dividend yield for 2021 and explain their significance to prospective shareholders. (8)

4.3 Calculate the accounts payable period (in days), noting that Neli Projects Ltd has, secured a ninety-day account with all its creditors and using average accounts payable for this calculation. (4)

4.4 Is the accounts payable period an ideal situation? Offer constructive advice to Neli Projects Ltd with regard to their accounts payable. (3)

4.5 Calculate the return on equity. Would shareholders be happy with the current return? Why / why not? (4)

4.6 Calculate the inventory turnover ratio (use average inventory) and explain the significance of this ratio