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Lavender Ltd Lavender Ltd is an organization which is at its mid-growth stage, operating in retail sector. Early last year, its operations were disrupted negatively by the COVID-19 pandemic. The companys management was very concerned about the future of the organization, and they have chosen you, as the marketing manager, with some idea of finance, to analyse the performance of the organization using the information below: Statement of Comprehensive Income for the year ended 30 September 2020. R000 Sales 850 Cost of sales (350) Gross profit 500 Operating expenses (280) Operating profit 220 Interest (20) Profit before tax 200 Tax @ 30% (60) Net profit for the year 140 Lavender Ltd Statement of Financial Position as at 30 September 2020 R000 Assets Non-current assets Property, plant, and equipment 1 200 Current assets 121 Inventory 60 Trade receivables 28 Cash and cash equivalents 33 Total assets 1 321 Equity and liabilities Capital and reserves Issued capital 1 000 Retained Earnings 100 Non-current liabilities Interest bearing borrowings: Long-term 186 Current liabilities Trade payables 35 Total Equity and Liabilities 1 321 Additional information: All sales are on credit. All purchases are on credit. Value of purchases is R362 000. Inventory Turnover is based on cost of sales. Inventory Turnover period for the previous financial period was 20 days. Accounts Receivable period for the previous financial period was 30 days. Accounts Payable period for the previous financial period was 25 days. Source: Hunde, T. (2022)

Required

Analyse the asset management ratios of the company for the year ending 30 September 2020.

(20 Marks)

Note

Your analysis should include:

Comment on your findings by explaining the meaning of the specific category of ratios and defining the ratios.

Comment on the known industry ratios and the previous years ratios in relation with your findings.

Calculations

Round your answers to two decimal places.

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