Planet Ltd produces fridges and freezers, which are sold to retailers. The financial statements for the last three years are as follows: Income statements for the year ending 31st December 2021 2022 £000 £000 Revenue 336,250 427,038 Cost of sales (126,675) (190,012) Gross profit 209,575 237,025 Administration expenses (73,290) (95,795) Distribution expenses (14,678) (8,720) Operating profit 121,407 121,931 Interest (8,750) (11,250) Profit before tax 118,142 166,326 Tax (22,531) (22,136) Profit for the year 90,126 88,545 Statements of financial position as at 31st December 2021 2022 ￡000 ￡000 Non-current assets Property, plant and equipment 286,250 327,650 Current assets Inventories 37,000 28,000 Trade receivables 42,000 43,500 Cash 19,632 24,570 98,632 96,070 Total assets 384,882 423,720 Current liabilities Trade payables 34,000 28,750 Accruals 22,531 22,136 Tax liability 1,250 1,425 57,781 52,311 Non-current liabilities Bank loan 175,000 225,000 Equity Ordinary share capital of £1 (fully paid) 80,000 80,000 Retained earnings 72,101 66,409 152,101 146,409 Total equity and liabilities 384,882 423,720 Calculate the following financial ratios for the year 2022 The ratios for 2021 have been provided in the table below Current ratio 1.71 :1 Quick ratio 1.07 :1 Receivables collection period 46 days

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter2: Building Blocks Of Managerial Accounting

Section: Chapter Questions

Problem 2EA: Park and West, LLC, provides consulting services to retail merchandisers in the Midwest. In 2019,...

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Planet Ltd produces fridges and freezers, which are sold to retailers. The financial statements for the last three years are as follows:

Income statements for the year ending 31^st December
	2021	2022
	£000	£000
Revenue	336,250	427,038
Cost of sales	(126,675)	(190,012)
Gross profit	209,575	237,025
Administration expenses	(73,290)	(95,795)
Distribution expenses	(14,678)	(8,720)
Operating profit	121,407	121,931
Interest	(8,750)	(11,250)
Profit before tax	118,142	166,326
Tax	(22,531)	(22,136)
Profit for the year	90,126	88,545

Statements of financial position as at 31^st December
	2021	2022
	￡000	￡000
Non-current assets
Property, plant and equipment	286,250	327,650
Current assets
Inventories	37,000	28,000
Trade receivables	42,000	43,500
Cash	19,632	24,570
	98,632	96,070
Total assets	384,882	423,720

Current liabilities
Trade payables	34,000	28,750
Accruals	22,531	22,136
Tax liability	1,250	1,425
	57,781	52,311
Non-current liabilities
Bank loan	175,000	225,000

Equity
Ordinary share capital of £1 (fully paid)	80,000	80,000
Retained earnings	72,101	66,409
	152,101	146,409
Total equity and liabilities	384,882	423,720