1. The following information relates to YANET PLC for the year ended 31 December, 2021 The statement of profit or loss for the year ended 31 December, 2021 Birr (000) 55,000 35,100 19,900 Revenue (net sales) Less: Cost of sales Gross profit Total expense EBIT Less: Interest Profit before tax Less: tax Profit for the year Assets Non-current assets Current assets Inventory Receivables Statement of Financial Position as at 31 December, 2021 2000 (Birr 000) 15,330 Cash Total Current assets Total Asset Equity and liabilities Equity Share capital Retained earnings Total Equity Non-current liabilities Long term- Loan Current liabilities 1. Rate of return on total asset 2. Profit Margin ratio 3. Current ratio 4. Inventory turnover ratio 5. Account receivable turnover ratio 1,908 4,362 2021 (Birr 000) 17,190 7,000 4,100 12,070 7,830 1,560 6,270 1,645 12,745 29,935 7,700 6,515 14,215 9,940 5,780 Total liabilities 15,720 Total equity and liabilities 29,935 Required: A) Calculate the following ratios for 2021. 22% 4% 2.5:1 6,930 3,675 2,110 12,715 28,045 6 13 40% 6 7,700 4,905 12,605 Industry Average 9,450 5,990 15.440 28,045 6. Debt ratio 7. Times interest earned B) Based on the above industry average, suggest the company profitability, liquidity and use of financial gearing.
