QUESTION THREE [25] The following information was selectively extracted from the accounting records of Hoskin Ltd as at 29 February 2020 (the end of their financial year):

	2020 (R)	2019 (R)
Sales (50% on credit)	2 200 000
Cost of Sales (80% of goods purchased on credit)	1 200 000
Net Income after tax	240 000
Tangible Assets	1 500 000	1 470 000
Inventory	200 000	300 000
Receivables	100 000	220 000
Cash	50 000	620 000
Payables	250 000	410 000
Loans at 9% p.a	210 000	65 000
Share Capital (500 000 ordinary shares at R2 each )	1 000 000	1 000 000
Retained Income	250 000	230 000
Share Premium	140 000	140 000

NB: a. Shares are currently trading at R4,10 per share.

Calculate: 3.1 The debtors average collection period and comment. (Last year was 37 days) Note: Debtors are given 30 days net to settle their accounts. (5 marks) 3.2 The creditors payment period and comment (Last year was 88 days All creditors accounts are 90 days less 2%). (5 marks ) 3.3 The price to earnings ratio for 2020 and explain in detail the significance of this ratio. (9 marks) 3.4 The debt equity ratio and explain in detail its significance to decision makers. (6 marks)