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Mwaikusa ltd revision question on ratio analysis

Mwaikusa Ltd a trading company commenced business in central Kigali in 2016, preparing its financial statements to 31 October.  The directors of Mwaikusa Ltd are trying to assess the financial performance and financial position of the company for the year ending 31 October 2017.  The



Following information has been extracted from the financial statements of the company:

  TZS “000”
Sales 1,824,800
Operating costs 1,204,000
Other expenses 760,000
Interest on loans 47,250
Inventory 264,000
Receivables 378,000
Property, plant & equipment 712,000
Payables 286,000
Share capital 920,000
Loans 315,000
Cash and bank 110,000



All expenses were paid during the year except for interest of loans.

REQUIRED:

Prepare a report to the management of Mwaikusa Ltd commenting on the profitability (gross profit margin and Net profit margin), liquidity (Current and Quick Ratio), debt management (debt to equity and interest cover ratios), and activity (Inventory, receivable and payables days), of the company.       

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