Week 11 Group Assessment Question: Zenex Limited manufactures and sells two types of bikes - Road bikes and Mountain bikes. The financial accountant of Zenex Limited has prepared the financial statements for the 2021 financial year. Use the financial information provided to: 1. Calculate the profitability and efficiency ratios for 2021 and 2020. 2. Compare the financial ratios between 2021 and 2020. Explain the changes in each profitability and efficiency ratio (the meaning of the changes and the reason for the changes). 3. Provide a conclusion on the overall profitability and efficiency of the company. Financial Ratios Return on assets (ROA) Return on equity (ROE) Profit margin Gross profit margin Inventory turnover Debtors turnover Formula = Profit/Total assets x 100% = Profit/Average owner's equity x 100% = Profit / Sales x 100% = (Sales cost of sales) / Sales x 100% = Cost of Sales / Average inventory = Sales / Average accounts receivable