Explanation

(a) Returns of shareholders fund

= \(\frac{\text{net profit}}{\text{shareholder fund}}\)

= \(\frac{Le 140,000}{ Le 200,000}\) = Le 0.70

(b) (Acid test ratio)

=  \(\frac{\text{current asset} - \text{stock}}{\text{current liability}}\)

=  \(\frac{Le 220,000 - Le 140 000}{Le 50,000}\)

=  \(\frac{Le 80,000}{ Le 50,000}\) = 1.60:1

(c) (Net profit margin)

= \(\frac{\text{net profit}}{\text{sales}}\) x 100%

= \(\frac{Le 140,000}{ Le 1,040,00}\) = 13.46%

(d) (Working captial ratio)

= \(\frac{\text{current asset}}{\text{current liabilities}}\)

= \(\frac{Le 220,000}{ Le 50,000}\) = 4.40:1

(e) (Stock turnover ratio)

= \(\frac{\text{cost of good sold}}{\text{Average stock}}\)

     (Average stock) = \(\frac{Le110000 - Le140000}{2}\)

= \(\frac{Le 700,000}{ Le 125,250}\) = Le 125,250

Stock turnover ratio

= \(\frac{Le 700,000}{ Le 125,250}\) = 5.5888

= 5.59 times

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