Question
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
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.
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