QUESTION TWO [25] Purca Limited operates in the manufacturing industry. The company constructs car parts and protective structures for motor vehicles in homes, large offices and factories. The company was established in 1815 by entrepreneur, Sandy Malou. It developed through aggressive marketing and has branches throughout RSA. After a brief listing on the development Capital Market, it obtained a listing on the main board of the JSE Securities Exchange in 2016. The summarised balance sheet and income statement for the financial year ended 30 September 2020 have been obtained for analysis. The dividend paid during the financial year amounted to R50 000. Purca Limiteds Statement of comprehensive income for the year ended 30 September 2021.

2021 2020

Revenue R1 700 000 R1 000 000

Less: Cost of sales R1 000 000 R400 000

Gross profit R 700 000 R600 000

Less: Operating expenses

Selling expense R70 000 R50 000

General and administrative expenses R120 000 R60 000

Lease expense R40 000 R10 000

Depreciation expense R100 000 R50 000

Less: Total operating expense R 330 000 R170 000

Profit from operations (EBIT) R370 000 R430 000

Less: Finance cost R70 000 R120 000

Net profit before tax R 300 000 R 310 000

Less: Income tax expense R90 000 R93 000

Profit for the year R 210 000 R 217 000

Purca Limiteds Statement of financial position as at 30 September 2021

2021 2020

ASSETS

Noncurrent assets

Plant and equipment R1 200 000 R1 050 000

Property and machinery R850 000 R800 000

Furniture and fixtures R300 000 R220 000

Vehicles R100 000 R80 000

Other noncurrent assets R50 000 R50 000

Total gross noncurrent assets (at cost) R2 500 000 R2 200 000

Less: Accumulated depreciation R1 300 000 R1 200 000

R1 200 000 R1 000 000

Current assets Inventory R600 000 R900 000

Trade receivables R400 000 R500 000

Cash R1 000 000 R500 000

R2 000 000 R1 900 000

TOTAL ASSETS R3 200 000 R2 900 000

EQUITY & LIABILITIES

Equity

Share capital R600 000 R600 000

Retained earnings R600 000 R500 000

Total equity R1 200 000 R1 100 000

Noncurrent liabilities

Long-term borrowings R600 000 R400 000

Current liabilities

Trade payables R700 000 R500 000

Short-term borrowing R600 000 R700 000

Accruals R100 000 R200 000

R1 400 000 R1 400 000

Total equity and liabilities R3 200 000 R2 900 000

REQUIRED: Calculate the following ratios for 2021:

2.1 Current ratio (3)

2.2 Quick ratio/acid ratio (3)

2.3 Creditors payment (3)

2.4 Debtors collection (3)

2.5 Stock turnover (3)

2.6 Gross profit margin (2)

2.7 Net profit margin (2)

2.8 Return on assets (2)

2.9 Return in equity (2)

2.10 Return on capital employed (2)