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You are the Accountant of a business, and it is your responsibility to prepare a monthly financial analysis of the companys performance. This information will

You are the Accountant of a business, and it is your responsibility to prepare a monthly financial analysis of the companys performance.

This information will be used as a guide to plan for the companys future. At the end of December 2022, your Accounts Supervisor presented you with the following information, which was extracted from the Restaurants books:

Details/Accounts $
Net sales 1,500,000
Cost of sales 900,000
Operating expenses 225,000
Stock 45,000
Accounts receivable 100,000
Cash 80,000
Accounts payable 90,000

Calculate the following financial ratios (Round to two decimal places and show workings):

Gross profit percentage. (3 marks)

Net profit percentage. (3 marks)

Current ratio. (3 marks)

Liquid ratio. (3 marks)

Debtors collection period. (4 marks)

Interpret the results that you calculated in part (d) and (e) above. (4 marks)

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