Below is an extract of the financial statements for Hanifah Ltd for the year ended 31st December

2022.

HANIFAH LTD

STATEMENT OF COMPREHENSIVE INCOME

2022 2021

Ugx ‘000’ Ugx ‘000’

Revenue 52,074 48,222

Cost of sales (31,160) (32,732)

Gross profit 20,914 15,490

Compensation on land 6,226

Rent and other incomes 282 206

Total income 21,196 21,922

Operating expenses (12,894) (15,518)

Operating profit 8,302 6,404

Financial costs 242 6,074

Profit (loss) before tax 8,060 330

Tax expense 3,312 142

Profit for the year 4,748 188

HANIFAH LTD

STATEMENT OF FINANCIAL POSITION

2022 2021

Ugx ‘000’ Ugx ‘000’

Issued capital 40,000 40,000

Retained earnings 15,898 11,150

Total equity 55,898 51,150

Non-current liabilities 65,294 54,792

Total equity and non-current liabilities 121,192 105,942

Represented by: - -

Non-current assets 95,466 101,150

Current assets (1) 35,060 23,962

Current liabilities 9,334 19,170

121,192 105,942

Notes

(1) Cash and inventory as components of current assts are given in the table
below.
2022 2021

Ugx ‘000’ Ugx ‘000’

Cash 7,050 4,600

Inventory 10,520 6,602

a) Calculate the following ratios for both 2022 and 2019

i. Net profit margin
ii. Debt to equity ratio
iii. Asset turnover ratio
iv. Gross profit margin
v. Current ratio
vi. Debt to capital ratio
vii. Cash ratio
viii. Inventory turnover ratio
b) From the calculated ratios above, use at least one ratio to explain the
performance of HANIFAH Ltd between 2021 and 2022 in terms of liquidity,
profitability, efficiency and solvency