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Answer the questions from the information provided.
3.1 Calculate the ratios for 2021 (answers expressed to two decimal places) that would reflect each of the following:
3.1.1 The percentage of profit on sales that the company produced from its operations prior to considering interest and taxes. (2 marks)
3.1.2 The amount of time it takes for the companys clients to settle their debts. (2 marks)
Additional Info
Additional information:
1. All purchases and sales of inventories are on credit.
2. Inventories amounted to R600 000 on 31 December 2020.
3. The ordinary shares were all issued at R4 each.
4. Credit terms to debtors are 30 days.
\begin{tabular}{|l|r|} \hline FINCH LIMITED & \multicolumn{2}{l|}{} \\ \hline STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED DECEMBER 2021 & R \\ \hline & 2400000 \\ \hline Sales & 1500000 \\ \hline Cost of sales & 540000 \\ \hline Operating profit & 60000 \\ \hline Interest expense & 480000 \\ \hline Profit before tax & 336000 \\ \hline Profit after tax & \\ \hline FINCH LIMITED & R \\ \hline STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2021 & 2850000 \\ \hline Assets & 915000 \\ \hline Non-current assets & 360000 \\ \hline Inventories & 690000 \\ \hline Accounts receivable & 4815000 \\ \hline Cash and cash equivalents & \\ \hline Total assets & 3000000 \\ \hline Equity and liabilities & \\ \hline Ordinary share capital & 5 \\ \hline \end{tabular} \begin{tabular}{|l|r|} \hline Retained earnings & 705000 \\ \hline Non-current liabilities & 600000 \\ \hline Current liabilities (Accounts payable only) & 510000 \\ \hline Total equity and liabilities & 4815000 \\ \hline \end{tabular}
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