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 000. • Inventories as at 31 December 2018 amounted to R130 000. • Current liabilities comprise accounts payable only. • All direct costs and revenues are on credit. Required: Calculate the following ratios using the information provided above. Where applicable, round off answers to two decimal places. 2.1 Profit margin 2.2 Debtor collection period 2.3 Creditor payment period
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 000.
• Inventories as at 31 December 2018 amounted to R130 000.
• Current liabilities comprise accounts payable only.
• All direct costs and revenues are on credit.
Required:
Calculate the following ratios using the information provided above. Where applicable, round off
answers to two decimal places.
2.1 Profit margin
2.2 Debtor collection period
2.3 Creditor payment period
2.4 Inventory turnover
2.5 Return on assets
2.6 Acid test ratio
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