The following information relates to Green Post Ltd.

Required:

4.1 Use the information provided below to calculate the following ratios for 2018. Where applicable, round off answers to two decimal places.

4.1.1 Gross margin

4.1.2 Debtor collection period

4.1.3 Creditor payment period

4.1.4 Return on assets

4.1.5 Return on equity

4.1.6 Interest cover

4.1.7 Total debt to assets

4.2 Comment on the following ratios:

Statement of Comprehensive Income for the year ended 31 December 2018 R Sales 2 000 000 Cost of sales 1 300 000 Gross profit 700 000 Operating profit 300 000 Interest expense 20 000 Profit before tax 280 000 Income tax 112 000 Profit after tax 168 000 2018 2017 Profit margin 10.74% 10,59% Inventory turnover 4.05 times 3.80 times Current ratio 1,34:1 1.59:1 Statement of Financial Position as at 31 December 2018 R Assets Non-current assets 390 000 Inventories 180 000 Accounts receivable 120 000 Cash 70 000 760 000 Equity and liabilities Ordinary share capital 400 000 Retained earnings 80 000 Long-term loan 170 000 Accounts payable 90 000 Other current liabilities 20 000 760 000 Note: 1. All purchases and sales of inventories are on credit. 2. Inventories on 31 December 2017 amounted to R540 000