The following information has been provided to you: Statement of Profit and Loss of Rara Company for the year ended on 31st December, 2023. ParticularsRsRsSales for the year1,500,000Less: Cost of…

The following information has been provided to you:

Statement of Profit and Loss of Rara Company for the year ended on 31st December, 2023.

ParticularsRsRsSales for the year1,500,000Less: Cost of goods sold1,120,000Gross profit****380,000Less: Administrative expenses160,000Depreciation on fixed assets40,000200,000Operating profit****180,000Add: Other income50,000Income before interest and tax****230,000Less: Interest Expenses30,000Net profit before tax****200,000Less: Tax (The company is in tax holiday)NilNet profit after tax****200,000

Statement of Financial Position of Rara Company as on 31st December, 2021 and 2023 Details20212023AssetsNon-current assets:Rs.Rs.Property, plant and equipment400,000500,000Investment250,000250,000Total non-current assets650,000750,000Current assets:Inventories120,000160,000Cash and Cash equivalent140,000180,000Account receivables30,000110,000Total Current Assets290,000450,000Total Assets940,0001,200,000Equity and liabilitiesEquity:Share capital at Rs 100 each600,000600,000Reserves200,000Total equity600,000800,000Liabilities:Non-current liabilities:15% Debentures120,000120,00015% Bank loan80,00080,000Total non-current liabilities****200,000200,000Current liabilities:Accounts payables90,0001,40,000Other payables50,00060,000Total current liabilities140,000200,000Total of equity and liabilities940,000****1,200,000Required: Computation of following ratios for 2023 a. Current ratio (2:1) b. Quick ratio (1:1) c. Debt to total capital ratio (less than 40%) d. Interest coverage ratio (more than 1) e. Inventory turnover ratio (at least 8 times) f. Total assets turnover ratio (more than 1 time) g. Net profit margin (at least 12%) h. Return on equity (at least 7%) i. Return on total assets (at least 5%) j. Return on capital employed (at least 5%) k. Comment on the result