Calculate the following ratios                            Return on Capital Employed (%) Gross profit percentage (%) Operating profit percentage(%) Assets turnover ratio ( use capital employed) (times) Quick/Acid test ratio (times) Debtors collection period (days) Earning per share (pence)

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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ABC Ltd

Statement of Financial Position

 

                                                            20X9                                            20X8

ASSETS                                             £,000                     £,000

Non-current assets

Machinery                                           2,100                   2,240                         

Motor Vehicles                                       394                     441

Investments                                           340                    340

                                                      2,834                              3,021

 

Current assets

Inventory                                             563                              398

Trade receivables                             1,181                                912

Cash                                                   9                                     11

                                                          1,753                               1,321

Total assets                                       4,587                           4,342

 

 

EQUITY AND LIABILITIES

Equity

Share capital                                   3,000                                  3,000

Retained earnings                              353                                 262

                                                              3,353                          3,262

Non-current liabilities

Long-term loan                                600                      600

Current liabilities

Trade payables                                 498                     398

Accrued Expenses                              15                     12

Tax payable                                         24                     29

Short term borrowing                           97                  41

                                                            480            634       

Total equity and liabilities                4,587          4,342   

 

 

ABC Ltd

Statement of Profit or Loss

                                                                  

                                                                   20X9                             20X8

                                                     £,000      £,000           £,000       £,000

 

Revenue                                                           3,461                          3,296

Opening inventory                                    398                          253

Purchases                                              2,623                       2,835

Closing inventory                                     (563)                       (398)

Cost of goods sold                                              (2,458)                      (2,240)

Gross profit                                                           1,003                        1,056

Distribution costs:

Depreciation                                            187                          239

Irrecoverable debt                                     17                            32

Advertising                                                24                            94

                                                                                (228)                        (365)

Administrative expenses:

Rent                                                           60                           60

Salaries and wages                                  362                         316

Miscellaneous expenses                          177                         159

                                                                                 (599)                       (535)

Operating profit                                                          176                         156

Dividend received                                                         --                            51

Finance cost                                                               (60)                         (53)

Profit before tax                                                          116                         154

Income tax expenses                                                   (25)                        (39)

Profit after taxation                                                         91                        115

 

 

Required

  • Calculate the following ratios                           
  1. Return on Capital Employed (%)
  2. Gross profit percentage (%)
  3. Operating profit percentage(%)
  4. Assets turnover ratio ( use capital employed) (times)
  5. Quick/Acid test ratio (times)
  6. Debtors collection period (days)
  7. Earning per share (pence)

 

State clearly the formulae used for each ratio and show all workings.

c- Based on your calculation and the  information available ,write a brief report on the financial performance and position of ABC Ltd.                                                                    

                                                                   

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