QUESTION2 [25]

ExtractsfromthefinancialstatementsofUCLimitedreflectsthefollowing:

StatementofComprehensiveIncomefortheyearended28February

	2019($)		2018($)
Sales	928000		600000
Costofsales	(640000)		(375000)
Grossprofit	288000		225000
Operatingexpenses	(145600)		(106000)
Depreciation	15 000		13 000
Otheroperatingexpenses	130600		93 000
Operatingprofit	142400		119000
Interestonmortgageloan	(12000)		(36000)
Netprofitbeforetax	130400		83 000
Income tax	(45120)		(29050)
Netprofitafter tax	85 280		53 950

StatementofFinancialPositionasat28 February

	2019($)		2018($)
ASSETS
Non-currentassets	1232 080		1 222 000
Property,plantandequipment(fixedassets)	1232 080		1222 000
Currentassets	178000		168000
Inventories(allTradingstock)	60 000		125000
Trade&other receivables	20 000		32 000
Cash&cashequivalents	98 000		11 000
	1 410 080		1 390 000
EQUITYANDLIABILITIES
Equity	1218 780		990000
Ordinarysharecapital(issuedat$10each)	950000		800000
Sharepremium	140000		80 000
Retainedincome	128780		110000
Non-currentliability(Mortgageloan,12% p.a.)	100000		300000
Currentliabilities	91 300		100000
Trade&otherpayables	49 000		69 000
Incometax	4 300		3 000
Shareholdersfordividends	38 000		28 000
	1410 080		1 390 000

Additionalinformation:

• Newshareswereissuedonthefirstdayofthefinancialyear.Interimandfinaldividendsfortheyearended28February2019amountedto$66500

Required:

1. Calculateeachofthefollowing ratiosfor2019.Whereapplicable,roundoff answerstotwo decimal places.

Netprofitmargin,

Inventoryturnover,

Returnoncapitalemployed,

Earningspershare,

Earningsretentionratio,

Currentratio,

Debttoequity

1. Commentonthefollowingratios:

		2019	2018
2.2.1	Acidtest ratio	1.4: 1	0.7: 1	(1)
2.2.2	Debtorscollectionperiod	38 days	30 days	(1)
2.2.3	Returnonassets	12.5%	7.5%	(2)