QUESTION THREE [25] The condensed and other financial information for Igloo Fashions appear below. Statement of Comprehe

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Question Three 25 The Condensed And Other Financial Information For Igloo Fashions Appear Below Statement Of Comprehe 1 (59.74 KiB) Viewed 23 times

Question Three 25 The Condensed And Other Financial Information For Igloo Fashions Appear Below Statement Of Comprehe 2 (24.77 KiB) Viewed 23 times

QUESTION THREE [25] The condensed and other financial information for Igloo Fashions appear below. Statement of Comprehensive Income for the year ended 31 December 2021 R Sales 803 750 Cost of sales (676 500) Gross profit 127 250 Operating expenses (92 250) 35 000 Operating profit Interest expense Profit before tax (12250) 22 750 Income tax (9 100) Profit after tax 13 650 REGENT BUSINESS SCHOOL (RBS) - JANUARY 2022 17 ADVANCED DIPLOMA IN FINANCIAL MANAGEMENT-ACADEMIC AND ASSESSMENT CALENDAR DISTANCE Statement of Financial Position as at 31 December 2021 Assets R Non-current assets Current assets 146 250 327 500 Total assets 473 750 Equity and liabilities 196 650 Shareholders' equity Non-current liabilities Current liabilities 128 250 148 850 Total equity and liabilities 473 750 Note: 1. Current assets (R327 500) include accounts receivable of R168 000, inventories of R75 000 and cash of R84 500. . Inventories as at 31 December 2020 amounted to R105 000. 2. 3. Current liabilities comprise accounts payable only. The following ratios were calculated 4. 2021 2020 Current ratio 2.20:1 15.83% 1.85:1 24.12% Gross margin 5. All purchases of inventory and sales are on credit
Required: 3.1 Calculate the following ratios (Where applicable, round off answers to two decimal places): 3.1.1 Gross Profit margin (2) 3.1.2 Debtor collection period (2) 3.1.3 Creditor payment period (2) 3.1.4 Inventory turnover (2) 3.1.5 Return on own capital (2) 3.1.6 Acid test ratio (2) 3.1.7 Debt to assets (2) (6) 3.2 Comment on the current ratio. 3.3 Igloo Fashions experienced a drop in gross profit margin in 2021. Provide two possible reasons for the drop in gross profit margin. (5)