Competitors Average Net profit margin Current Acid test ratio Gross Accounts receivable Accounts collection period payable payment period 27 Days 12Days profit margin ratio 16 Days 28 Days Year 2019 0.32 0.55 2.7 1.34 Year 2020 0.28 0.56 2.6 1.32 26 Days 17 Days Year 2021 0.02 0.08 2.8 1.38 The ratios for Anne's business for October 2021 are as calculated below - Net Profit Gross Profit Current Acid Test Accounts Accounts Margin Margin Ratio Ratio receivable payable collection payment period 389.18 days period Year 2021 -0.25 0.14 3.08 3.01 9.77 days Assuming Anne's competitor's ratio averages are as stated above for month October of years 2019, 2020 and 2021: Analyse her performance with reference to the ratios of October 2021 calculated in comparison to those of her competitor. Also, briefly explain the impact of Covid -19 outbreak on the average ratios
Competitors Average Net profit margin Current Acid test ratio Gross Accounts receivable Accounts collection period payable payment period 27 Days 12Days profit margin ratio 16 Days 28 Days Year 2019 0.32 0.55 2.7 1.34 Year 2020 0.28 0.56 2.6 1.32 26 Days 17 Days Year 2021 0.02 0.08 2.8 1.38 The ratios for Anne's business for October 2021 are as calculated below - Net Profit Gross Profit Current Acid Test Accounts Accounts Margin Margin Ratio Ratio receivable payable collection payment period 389.18 days period Year 2021 -0.25 0.14 3.08 3.01 9.77 days Assuming Anne's competitor's ratio averages are as stated above for month October of years 2019, 2020 and 2021: Analyse her performance with reference to the ratios of October 2021 calculated in comparison to those of her competitor. Also, briefly explain the impact of Covid -19 outbreak on the average ratios
Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter4: Accounting For Retail Operations
Section: Chapter Questions
Problem 4.2MBA: Sales transactions Using transactions listed in P4-2, indicate the effects of each transaction on...
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Kindly explain the comparision of ratios as per the attached question - the points of comparision and the impact of each factor
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