Answer Happy

QUESTION FOUR [25] The following information was presented in the financial records of Fulto Limited: Statement of comprehensive income for the year ended 31 December 2021 R Sales 1 250 000 Cost of sales (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 2021 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 Notes: Current assets (R386 000) include accounts receivable of R160 000, inventories of R80 000 and cash of R146 000. Inventories as at 31 December 2020 amounted to R130 000. Current liabilities comprise accounts payable only. All purchases and sales are on credit. Required: Calculate and comment on the following ratios using the information provided above. Where applicable, round off answers to two decimal places. 4.1 Profit margin (3) 4.2 Debtor collection period (5) 4.3 Creditor payment period (5) 4.4 Inventory turnover (5) 4.5 Return on assets (3) 4.6 Acid test ratio (4)