QUESTION ONE $[25]$

The extracts of the financial statements of TBN Limited for $2023$ are provided below:

Extract of the Statement of Comprehensive Income for the year ended $31$ December $2023$

R

Sales $($credit$)988000$

Less cost of sales $400000$

Gross profit $560000$

Less Operating expenses $160000$

Operating profit $400000$

Less interest expense $70000$

Profit before tax $330000$

Profit after tax $280000$

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

Non$-$current assets $1140000$

Inventories $266000$

Debtors $300000$

Bank $220000$

Total assets $1926000$

Ordinary share capital $1000000$

Retained earnings $482000$

Non$-$current liabilities $240000$

Creditors $215000$

Total liabilities $1926000$

Required:

Calculate the following ratios for $2023$: $($Where applicable, answers must be rounded off to two

decimal places.$)$

$1\mathrm{.}1$ Profit margin $(3)$

$1\mathrm{.}2$ Interest cover $(4)$

$1\mathrm{.}3$ Debtors collection period $(4)$

$1\mathrm{.}4$ Current ratio $(4)$

$1\mathrm{.}5$ Acid test ratio $(4)$

$1\mathrm{.}6$ Return on total assets $(2)$

$1\mathrm{.}7$ Inventory turnover $($Inventory $1$ January $2021$: R$204000)(2)$

$1\mathrm{.}8$ Comment on the acid test ratio $(2)$