Calculate the following ratios, Answer ALL questions. 1. Gross profit ratio 2. Inventory turnover ratio 3. Operating ratio
Merit is a Company that operates in the Retail business and has a 30 June 2021 year end. The Books of Merit private limited are as follows:
Statement of Profit or loss and other comprehensive income as at 30 June 2021
R
Sales
1 500 000
Cost of Sales
(750 000)
Gross Profit
750 000
Office expenses (Including interest on debentures)
(125 000)
Selling expenses
(125 000)
Profit before Tax
500 000
Tax
(250 000)
Net Profit
250 000
R
Assets
Fixed Assets
5 500 000
Inventory
175 000
Trade Receivables
350 000
Bills Receivables
50 000
Cash
225 000
Intangible Assets
100 000
Total Assets
6 400 000
Equity and Liabilities
Share Capital
2 000 000
10%
2 000 000
1 100 000
10% Debentures
1 000 000
Trade Payables
100 000
Bank Overdraft
150 000
6
Bills Payables
45 000
Outstanding Expenses
5 000
Total Equity and Liabilities
6 400 000
Additional Information
1. Opening Inventory was R 325 000
2. A year has 360 days
Required
Calculate the following ratios, Answer ALL questions.
1. Gross profit ratio
2. Inventory turnover ratio
3. Operating ratio
4.
5.
6. Debtors/Receivables ratio
7. Creditors/Payables ratio
8. Proprietary/Shareholders to Total assets ratio
9.
10. Rate of return on equity shares
11. Days’ supply (Inventory) on hand
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