a) A firm has sales of R23, total assets of R39 and total debt of R7. The net profit margin is 4%. What is the value of Net Profit? R What is the ROE? b) A firm has net working capital of R714.15, current liabilities of R2276.81 & inventory of R803.44. What is the current ratio? What is the quick ratio?
Financial Ratios
A Ratio refers to a figure calculated as a reference to the relationship of two or more numbers and can be expressed as a fraction, proportion, percentage, or the number of times. When the number is determined by taking two accounting numbers derived from the financial statements, it is termed as the accounting ratio.
Return on Equity
The Return on Equity (RoE) is a measure of the profitability of a business concerning the funds by its stockholders/shareholders. ROE is a metric used generally to determine how well the company utilizes its funds provided by the equity shareholders.
This is 1 question that has 2 sub-parts. Please answer both a and b. Please provide a detailed working out.
NB!!! Round off all answers to 2 decimal places.
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