The following information appeared in the annual financial statements of Hitashi Projects Limited: Statement of Comprehensive Income for the year ended 31 December 2019 R Revenue 1 250 000 Direct costs (786 000) Gross profit 464 000 Operating expenses (124 000) Operating profit 340 000 Interest expense (15 000) Profit before tax 325 000 Income tax (97 500) Profit after tax 227 500 Statement of Financial Position as at 31 December 2019 Assets R Non-current assets 314 000 Current assets 386 000 Total assets 700 000 Equity and liabilities Shareholders’ equity 350 000 Non-current liabilities 205 000 Current liabilities 145 000 Total equity and liabilities 700 000 Note Current assets (R386 000) include accounts receivable of R160 000, inventories of R80 000 and cash of R146 Inventories as at 31 December 2018 amounted to R130 Current liabilities comprise accounts payable All direct costs and revenues are on Required: Calculate the following ratios using the information provided above. Where applicable, round off answers to two decimal places. Profit margin (4) Debtor collection period (4) Creditor payment period (4) Inventory turnover (4) Return on assets (4) Acid test ratio (5)

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter6: Deductions And Losses: In General

Section: Chapter Questions

Problem 56P

See similar textbooks

Statement of Comprehensive Income for the year ended 31 December 2019

	R
Revenue	1 250 000
Direct costs	(786 000)
Gross profit	464 000
Operating expenses	(124 000)
Operating profit	340 000
Interest expense	(15 000)
Profit before tax	325 000
Income tax	(97 500)
Profit after tax	227 500

Statement of Financial Position as at 31 December 2019

Assets	R
Non-current assets	314 000
Current assets	386 000
Total assets	700 000
Equity and liabilities
Shareholders’ equity	350 000
Non-current liabilities	205 000
Current liabilities	145 000
Total equity and liabilities	700 000

Note

Current assets (R386 000) include accounts receivable of R160 000, inventories of R80 000 and cash of R146
Inventories as at 31 December 2018 amounted to R130
Current liabilities comprise accounts payable
All direct costs and revenues are on

Required:

Calculate the following ratios using the information provided above. Where applicable, round off answers to two decimal places.

Profit margin (4)

Debtor collection period (4)

Creditor payment period (4)

Inventory turnover (4)

Return on assets (4)

Acid test ratio (5)

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions