REQUIRED Use the information given below to calculate the following ratios for 2019. (Where applicable, round off answers to two decimal places.) Also provide a brief interpretation of each answer. The comparative figures for 2018 are given in brackets. 4.1 Gross margin (2018: 60.53%) Inventory turnover (2018: 5.02 times) Acid test ratio (2018: 1.05:1) Debt to equity (2018: 60.38%) Return on equity (2018: 36.45%) Debtors collection period (2018: 29.56 days) Earnings per share (2018: 108.42 cents) 4.2 4.3 4.4 4.5 -4.6 -4.7 INFORMATION FIAMMA LIMITED EXTRACT OF STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2019 Sales (all credit) Operating expenses Operating profit Company tax TH Note: 1. The goods were sold at cost plus 90%. 2. The tax rate of the company is 30%. R 1 668 200 (486 000) 308 000 (86 400)
REQUIRED Use the information given below to calculate the following ratios for 2019. (Where applicable, round off answers to two decimal places.) Also provide a brief interpretation of each answer. The comparative figures for 2018 are given in brackets. 4.1 Gross margin (2018: 60.53%) Inventory turnover (2018: 5.02 times) Acid test ratio (2018: 1.05:1) Debt to equity (2018: 60.38%) Return on equity (2018: 36.45%) Debtors collection period (2018: 29.56 days) Earnings per share (2018: 108.42 cents) 4.2 4.3 4.4 4.5 -4.6 -4.7 INFORMATION FIAMMA LIMITED EXTRACT OF STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2019 Sales (all credit) Operating expenses Operating profit Company tax TH Note: 1. The goods were sold at cost plus 90%. 2. The tax rate of the company is 30%. R 1 668 200 (486 000) 308 000 (86 400)
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter12: Fainancial Statement Analysis
Section: Chapter Questions
Problem 81E
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