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UESTION 4(20 Marks) REQUIRED Use the information provided below to answer the following questions....

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Accounting

UESTION 4(20 Marks)
REQUIRED
Use the information provided below to answer the following questions.
4.1 Calculate the following ratios for 2023 only. Note: Use the formulas provided in the formula sheet
only (that appear after QUESTION 5). Answers to the ratios must be expressed to two decimal
places.
4.1.1 Inventory turnover (2 marks)
4.1.2 Net profit margin (2 marks)
4.1.3 Debt-equity (2 marks)
4.1.4 Earnings per share (2 marks)
4.1.5 Finance cost coverage (2 marks)
4.1.6 Average collection period (2 marks)
4.2 Will the company be able to pay its short-term debts if business conditions are
unfavourable? Motivate your answer by using an appropriate ratio. (4 marks)
4.3 Will the shareholders of the company be satisfied with the return on their investments?
Support your answer with the use of an appropriate ratio. (4 marks)
INFORMATION
The extracts of the financial statements of Fabrice Limited for 2022 and 2023 are provided below.
FABRICE LIMITED
STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2023
R
Sales 990000
Cost of sales 600000
Earnings before interest and taxes 250000
Interest expense 30000
Profit before tax 220000
Company tax 59400

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