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INFORMATION

Statement of comprehensive income for the year ended 31 December 2019 R Sales (all credit) 7 800 000 Cost of sales 6 600 000 Gross profit 1 200 000 Operating expenses 800 000 Operating profit 400 000 Interest expense 252 000 Profit before tax 148 000 Tax 60 000 Profit after tax 88 000

Excerpts of financial statements of Brown Limited for 2019 are as follows:

Statement of changes in equity the year ended

31 December 2019

Statement of financial position as at 31 December 2019	R
Assets
Non-current assets	722 000
Inventories	1 672 000
Accounts receivable	804 000
Cash	104 000
Total assets	3 302 000

Equity and liabilities Ordinary share capital 920 000 Retained earnings 452 000 Long-term loan (18%) 850 000 Accounts payable 350 000 Other current liabilities 730 000 Total Equity and Liabilities 3 302 000

Required:

1. Use the information provided to calculate the following ratios for 2019. Where applicable, round off answers to two decimal places.
   1. Operating margin (2)
   2. Debtor collection period (2)
   3. Return on assets (2)
   4. Return on equity (2)
   5. Earnings retention ratio (2)
   6. Acid test ratio (2)

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