Questions
Single choice
A performance indicator used to assess efficiency is
Options
A.a. Gearing Ratio.
B.b. Working Capital Ratio (WCR).
C.c. Net Profit Margin (NPM).
D.d. Creditors Turnover (CTO).

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Step-by-Step Analysis
To approach this question, I will evaluate what each financial metric typically measures and how it relates to efficiency.
Option a: Gearing Ratio. This ratio measures financial leverage by comparing debt to equity. It reflects the capital structure and risk due to debt, not the efficiency of day-to-day operations or how quickly activities occu......Login to view full explanationLog in for full answers
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Question text AlwaysNet Ltd reported the following information for the year ended 30 June 2025. [table] AlwaysNet Ltd Statement of Profit or Loss for the year ending 30 June 2025 (in $ 000s) [/table] [table] | 2025 Net sales | $2,025,165 Cost of sales | 1,395,650 Selling and administrative expenses | 299,400 Non-recurring expenses | 26,000 Earnings before interest, tax, depreciation and amortisation (EBITDA) | $304,115 Depreciation | 107,500 Earnings before interest and taxes (EBIT) | $196,615 Interest expense | 112,675 Earnings before tax (EBT) | $83,940 Tax (30%) | 25,182 Profit | $58,758 [/table] [table] AlwaysNet Ltd Statement of Financial Position as at 30 June 2025 (in $ 000s) [/table] [table] Assets | | Liabilities and equity | Cash and marketable securities | $480,000 | Accounts payable | $585,000 Accounts receivable | $675,000 | Notes payable | $297,000 Inventories | $1,405,000 | Accrued income tax | $233,950 Other current assets | $40,000 | Total current liabilities | $1,115,950 Total current assets | $2,600,000 | Long-term debt | $1,301,500 Property, plant and equipment | $2,125,000 | Total liabilities | $2,417,450 | | Ordinary shares | $1,257,500 | | Retained earnings | $1,050,050 | | Total equity | $2,307,550 Total assets | $4,725,000 | Total liabilities and equity | $4,725,000 [/table] Calculate the following ratios using the financial statements provided by AlwaysNet Ltd as shown above. Important note: Express your answer as per the hint given next to the textbox. Do not include $ sign or % sign. Do not use comma separators. a) (2 marks) Current ratio = Answer 1 Question 37[input] (as a number of times; round to two decimal places, such as, rounding 1.234 to 1.23 or 1.235 to 1.24) b) (2 marks) Quick ratio = Answer 2 Question 37[input] (as a number of times; round to two decimal places, such as, rounding 1.234 to 1.23 or 1.235 to 1.24) c) (2 marks) Inventory turnover ratio = Answer 3 Question 37[input] (as a number of times; round to two decimal places, such as, rounding 1.234 to 1.23 or 1.235 to 1.24) d) (2 marks) Days’ Sales Outstanding (DSO) = Answer 4 Question 37[input] (as a number of days; round to a whole number, such as, rounding 123.4 to 123 or 123.5 to 124) e) (2 marks) Asset turnover = Answer 5 Question 37[input] (as a number of times; round to two decimal places, such as, rounding 1.234 to 1.23 or 1.235 to 1.24) f) (2 marks) Net profit margin = Answer 6 Question 37[input]% (as a percentage; round to two decimal places, such as, rounding 0.1234 to 12.34 or 0.12345 to 12.35) g) (2 marks) Return on Assets (ROA) = Answer 7 Question 37[input]% (as a percentage; round to two decimal places, such as, rounding 0.1234 to 12.34 or 0.12345 to 12.35) h) (2 marks) Return on Equity (ROE) = Answer 8 Question 37[input]% (as a percentage; round to two decimal places, such as, rounding 0.1234 to 12.34 or 0.12345 to 12.35) i) (2 marks) Total debt ratio = Answer 9 Question 37[input]% (as a percentage; round to two decimal places, such as, rounding 0.1234 to 12.34 or 0.12345 to 12.35) j) (2 marks) Debt-to-equity ratio = Answer 10 Question 37[input]% (as a percentage; round to two decimal places, such as, rounding 0.1234 to 12.34 or 0.12345 to 12.35)
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