Use the information provided below to answer the following questions. Note: Use the formulas provided in the formula sheet only $($that appear after QUESTION $5).$ The answers to the ratios must be expressed to two decimal places.

$4\mathrm{.}1$

Calculate the ratio that determines the company$$s profitability after the cost of sales have been deducted from the sales.

$(2$ marks$)$

$4\mathrm{.}2$

Compare the earnings per share with the dividend per share for $2023.$ What conclusions can you draw from this comparison?

$(4$ marks$)$

$4\mathrm{.}3$

Will the shareholders be satisfied with the return earned by the company on the own capital? Motivate your answer by using an appropriate ratio.

$(3$ marks$)$

$4\mathrm{.}4$

Comment on the ability of the company to settle its short$-$term obligations with just its most liquid current assets. Use a ratio to support your answer.

$(3$ marks$)$

$4\mathrm{.}5$

Comment on the effectiveness with which the company has managed the inventory, debtors and creditors. Support your answer by calculating the relevant ratios.

$(8$ marks$)$

INFORMATION

Excerpts of the financial data of Daiken Limited for $2023$ are as follows:

STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED $31$ DECEMBER $2023$

R

Sales

$2200000$

Cost of sales

$1538000$

Opening inventory

$92000$

Purchases

$?$

Closing inventory

$114000$

Gross profit

$?$

Operating profit

$482000$

Interest expense

$80000$

Profit before tax

$402000$

Company tax

$108540$

STATEMENT OF FINANCIAL POSITION AS AT $31$ DECEMBER $2023$

R

Non$-$current assets

$1280000$

Inventories

$?$

Accounts receivable

$680000$

Cash

$8000$

Ordinary share capital

$900000$

Retained earnings

$172000$

Long$-$term loan

$658000$

Accounts payable

$220000$

Company tax payable

$72000$

Dividends payable

$60000$

Additional information

$$

All purchases and sales of inventories are on credit.

$$

There were $450000$ ordinary shares in issue during $2023.$

$$

An interim dividend of R$50000$ was paid on $30$ June $2023.$

$$

Credit terms to debtors were $30$ days whilst creditors have granted credit terms of $60$ days.

$$

Inventories were replaced after approximately $30$ days during $2022.$Use the information provided below to answer the following questions. Note: Use the formulas provided in

the formula sheet only $($that appear after QUESTION $5).$ The answers to the ratios must be expressed to two

decimal places.

$4\mathrm{.}1$ Calculate the ratio that determines the company's profitability after the cost of sales have

been deducted from the sales.

$4\mathrm{.}2$ Compare the earnings per share with the dividend per share for $2023.$ What conclusions

can you draw from this comparison?

$4\mathrm{.}3$ Will the shareholders be satisfied with the return earned by the company on the own

capital? Motivate your answer by using an appropriate ratio.

$4\mathrm{.}4$ Comment on the ability of the company to settle its short$-$term obligations with just its most

liquid current assets. Use a ratio to support your answer.

$4\mathrm{.}5$ Comment on the effectiveness with which the company has managed the inventory,

debtors and creditors. Support your answer by calculating the relevant ratios.

INFORMATION

Excerpts of the financial data of Daiken Limited for $2023$ are as follows: