4.1 Use the information provided below to calculate the following ratios. Where applicable, express answers to two decimal places. 4.1.1 Profit margin 4.1.2 Debtors collection period 4.1.3 Return on equity 4.1.4 Acid test ratio 4.1.5 Debt to assets 4.1.6 Return on assets 4.1.7 Interest coverage 4.2 Comment on the current ratio which was 1.56:1 in 2019 and 2.19:1 in 2020. 4.3 Provide two possible reasons for a drop in the gross margin from 27.35% in 2019 to 15.82% in 2020. INFORMATION Extracts of the financial statements of Sibaya Limited are as follows: SIBAYA LIMITED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2020 R Sales (all credit) Cost of sales Gross profit Operating expenses Operating profit Interest expense 2 409 000 (2 028 000) 381 000 (276 000) 105 000 (36 000) 69 000 (19 320) Profit before tax Income tax Profit after tax 49 680

4.1 Use the information provided below to calculate the following ratios. Where applicable, express answers to two decimal places. 4.1.1 Profit margin 4.1.2 Debtors collection period 4.1.3 Return on equity 4.1.4 Acid test ratio 4.1.5 Debt to assets 4.1.6 Return on assets 4.1.7 Interest coverage 4.2 Comment on the current ratio which was 1.56:1 in 2019 and 2.19:1 in 2020. 4.3 Provide two possible reasons for a drop in the gross margin from 27.35% in 2019 to 15.82% in 2020. INFORMATION Extracts of the financial statements of Sibaya Limited are as follows: SIBAYA LIMITED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2020 R Sales (all credit) Cost of sales Gross profit Operating expenses Operating profit Interest expense 2 409 000 (2 028 000) 381 000 (276 000) 105 000 (36 000) 69 000 (19 320) Profit before tax Income tax Profit after tax 49 680

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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