Excerpts of financial data of Matend Projects Limited for 2019 are as follows: Statement of Comprehensive Income for the year ended 31 December 2019 R Revenue (all credit) 3 000 000 Gross profit 1 050 000 Operating profit 450 000 Profit before tax 420 000 Profit after tax 252 000 Statement of Financial Position as at 31 December 2019 R Assets Non-current assets 585 000 Inventories 270 000 Accounts receivable 180 000 Cash 105 000 1 140 000 Equity and liabilities Equity 750 000 Long-term loan 255 000 Accounts payable 135 000 1 140 000 Required Calculate and comment on the following ratios for 2019. (Where applicable, round off answers to two decimal places. Ratios for 2018 are provided in brackets): 3.1 Gross margin (2018: 40.45%) (5) 3.2 Debtor collection period (2018: 36.54 days) 3.3 Return on equity (2018: 25.89%) 3.4 Debt to equity (2018: 40%) 3.5 Acid test ratio (2018: 0.98:1)
Excerpts of financial data of Matend Projects Limited for 2019 are as follows:
|
Statement of Comprehensive Income for the year ended 31 December 2019 |
|
|
|
R |
|
Revenue (all credit) |
3 000 000 |
|
Gross profit |
1 050 000 |
|
Operating profit |
450 000 |
|
Profit before tax |
420 000 |
|
Profit after tax |
252 000 |
|
|
|
|
|
R |
|
Assets |
|
|
Non-current assets |
585 000 |
|
Inventories |
270 000 |
|
|
180 000 |
|
Cash |
105 000 |
|
|
1 140 000 |
|
Equity and liabilities |
|
|
Equity |
750 000 |
|
Long-term loan |
255 000 |
|
Accounts payable |
135 000 |
|
|
1 140 000 |
Required
Calculate and comment on the following ratios for 2019. (Where applicable, round off answers to two decimal places. Ratios for 2018 are provided in brackets):
|
3.1 |
Gross margin |
(2018: 40.45%) |
(5) |
|
3.2 |
Debtor collection period |
(2018: 36.54 days) |
|
|
3.3 |
Return on equity |
(2018: 25.89%) |
|
|
3.4 |
Debt to equity |
(2018: 40%) |
|
|
3.5 |
Acid test ratio |
(2018: 0.98:1) |
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