R Sales 1 680 000 Cost of Sales 1 008 000 Cash and cash equivalents 46 000 Debtors 103 000 Inventory 209 000 Prepaid expenses 20 000 Furniture and equipment 55 000 Land and buildings 57 000 Creditors 105 000 Taxation payable 55 000 15% long term loan 210 000 REQUIRED: Calculate the following ratios in respect of the year ended 30 November 2023. Round off to two decimal points. Assume a 365-day year. Show all formulas and workings for marks. 2.1​Gross profit margin. 2.2​Current ratio. 2.3​Acid-test ratio.
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Step 1
1 Gross profit margin: The formula for Gross profit margin is (Sales - Cost of Sales) / Sales * 100. So, Gross profit = Sales - Cost of Sales = 1,680,000 - 1,008,000 = 672,000 Gross profit margin = (672,000 / 1,680,000) * 100 = 40% Show more…
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