a. Given the debtor's collection period, stock days on hand and creditors payment period for 2020 are 46,60 and 46.34 respectively, calculate the debtor's collection period, stock days on hand and creditors payment period for 2021 also. Analyse why the ratios changed for the two years.b. Suggest ways to improve the financial ratios. Read the scenario below and answer the questions that follow:Sail Along (Pty) Ltd is a small sailing boat and equipment manufacturer. It alsohas its own retail outlet and supplies to other shops. It is based in the EastenCape and, due to the extent of open water lakes in the area, has always run asuccessful business.Over the past few years, the community has become more health conscious andinterest in outdoor sporting activities has increased. Many foreigners spend theirsummers here and partake in water sports.The company is funded by debt and equity. Two years ago, it had a R150 000cash injection from shareholders to reduce its debt levels. This was to help thecompany through the pandemic.At around the same time, the company launched an online purchase option,which has been very successful.Sail Along developed a unique kite surfer that is able to lift a surfer out of thewater at least 10 metres. Manufacturing commenced in mid-2020 and thecompany is experiencing good demand through online sales. Below are the financial statements for the year ended 31 December 2021 and2020.Sail Along (Pty) LimitedStatement of profit or loss and comprehensive for the year ended31 December 202120212020Revenue3 250 0002 660 000(1 570 000)1 680 000Cost of sales(1 325 000)Gross profit1 335 000Other costs(1 190 000)(1 010 000)Earnings before interest and tax490 000325 000Interest expense(26 500)(24 900)Profit before taxation463 500300 100Taxation(129 780)(84 028)Profit for the year333 720216 072Sail Along (Pty) LimitedStatement of financial position as at 31 December 2021202120202019ASSETSNon-current assets802 000720 000600 000Property, plant, equipment802 000720 000600 000Current assets614 000498 000444 000Inventory270 000223 000209 000Accounts receivable340 000255 000210 000Cash & cash equivalents4 00020 00025 000TOTAL ASSETS1 416 0001 218 0001 044 000EQUITY AND LIABILITIESEquity and reserves866 000789 000544 000Share capital400 000400 000250 000Retained income466 000389 000294 000Non-current liabilities265 000249 000340 000Long-term loan265 000249 000340 000Current liabilities285 000180 000160 000Accounts payable285 000180 000160 000TOTAL EQUITY AND LIABILITIES1 416 0001 218 0001 044 000Additional information:1.70% of sales are on credit.2.All purchases are on credit.3.There are 365 days in a year.

Name: a. Given the debtor's collection period, stock days on hand and credit
Uploaded: 2024-03-04T10:43:15.000Z
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Description: a. Given the debtor's collection period, stock days on hand and creditors payment period for 2020 are 46,60 and 46.34 respectively, calculate the debtor's collection period, stock days on hand and creditors payment period for 2021 also. Analyse why