You have been provided with the following summarized accounts of Golden

| June 14, 2018

You have been provided with the following summarized accounts of Golden Times Ltd. For the year ended 31 March 20XX:Balance sheet as at 31 March 20XXFixed assets:Sh.Sh.Sh.Freehold property (Net book value)Plant and machinery (Net book value)Motor vehicles (Net book value)Furniture and fittings (Net book value)Current Assets:StocksDebtorsInvestmentsCurrent liabilities:Trade creditorsBank overdraftCorporation taxDividends payableFinanced by:Authorised share capital – 800,000Sh.1 ordinary sharesIssued and fully paid: 400,000 Sh.1 Ordinary sharesCapital reserveRevenue reserveLoan capital: 400,000 10% Sh.1 Debentures238,400878,400176,000107,2001,000,000400,000120,0001,500,000(1,400,000)480,000800,000200,000200,0001,680,000120,0001,800,000400,000200,000800,000400,0001,800,000Profit and loss account for the year ended 31 March 20XXSh.Sales (credit)Profit after charging all expenses except interest on debenturesLess: debenture interestProfit before taxCorporation taxLess: ordinary dividend proposedRetained profit transferred to revenue reserve4,000,000440,00040,000400,000176,000224,000107,200116,800The following additional information was available:1.The purchases for the year were Sh.2,160,000 while the cost of sales was Sh.3,000,000.2.The market price for Golden Times Ltd. Ordinary shares as at 31 March 20XX was Sh.53.The company estimates the current value of its freehold property at Sh.1,100,000.Required:(a)Compute the following ratios for Golden Times Ltd.:Return on capital employeesThe profit marginThe turnover of capitalCurrent ratio;Liquid ratio;Number of days accounts receivable are outstanding;Property ratio;Stock turnover ratio;Dividend yield ratio;Price earnings ratio.(b)Comment on Golden Times Ltd. Liquidity stating the reference points to which relevant ratios can be compared.

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