QUESTION 3 INTERPRETATION OF FINANCIAL INFORMATION You are provided with financial indicators of Mashonisa Traders on 31 August 2018. The business has a target mark up on cost of 75% Use the information to answer the questions that follow: N.B: In answering the questions quote relevant Indicators, figures and trends. 1. INFORMATION 2018 60% 46% 21% 16,1% 27,9% 2017 63% Gross profit on cost Gross profit on sales Operating expenses on sales Operating profit on sales Return on owner's equity Current ratio 50% 18% 19,2% 23% 1,9:1 0,9:1 2,5:1 12% 2,1:1 1:1 3,3.1 12% Acid test ratio Solvency ratio Interest on fixed deposits REQUIRED: The owner of Mashonisa Traders is happy about the liquidity position of the business. Quote TWO relevant financial indicators with figures to support her opinion. 3.1 The manager is concerned about the mark up % achieved by the business. Quote ONE relevant indicator to support her concern. And explain what caused the business not to achieve its targeted mark up. Mention TWO points. 3.2 The owner of the business is not satisfied by the operating efficiency of the business. Quote TW0 relevant financial indicators with figures to support his opinion 3.3 3.4 The manager feels that the owner must be satisfied with the returns he is earning in this business. Do you agree with this opinion? o Explain by quoting ONE financial Indicator to support your answer. Also quote figures to support your answer.
QUESTION 3 INTERPRETATION OF FINANCIAL INFORMATION You are provided with financial indicators of Mashonisa Traders on 31 August 2018. The business has a target mark up on cost of 75% Use the information to answer the questions that follow: N.B: In answering the questions quote relevant Indicators, figures and trends. 1. INFORMATION 2018 60% 46% 21% 16,1% 27,9% 2017 63% Gross profit on cost Gross profit on sales Operating expenses on sales Operating profit on sales Return on owner's equity Current ratio 50% 18% 19,2% 23% 1,9:1 0,9:1 2,5:1 12% 2,1:1 1:1 3,3.1 12% Acid test ratio Solvency ratio Interest on fixed deposits REQUIRED: The owner of Mashonisa Traders is happy about the liquidity position of the business. Quote TWO relevant financial indicators with figures to support her opinion. 3.1 The manager is concerned about the mark up % achieved by the business. Quote ONE relevant indicator to support her concern. And explain what caused the business not to achieve its targeted mark up. Mention TWO points. 3.2 The owner of the business is not satisfied by the operating efficiency of the business. Quote TW0 relevant financial indicators with figures to support his opinion 3.3 3.4 The manager feels that the owner must be satisfied with the returns he is earning in this business. Do you agree with this opinion? o Explain by quoting ONE financial Indicator to support your answer. Also quote figures to support your answer.
Corporate Financial Accounting
14th Edition
ISBN:9781305653535
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter14: Financial Statement Analysis
Section: Chapter Questions
Problem 14.1EX: Vertical analysis of income statement Revenue and expense data for Innovation Quarter Inc. for two...
Related questions
Question
Transcribed Image Text:QUESTION 3
INTERPRETATION OF FINANCIAL INFORMATION
You are provided with financial indicators of Mashonisa Traders on 31 August 2018.
The business has a target mark up on cost of 75%
Use the information to answer the questions that follow:
N.B: In answering the questions quote relevant Indicators, figures and trends.
1.
INFORMATION
2018
60%
46%
21%
16,1%
27,9%
2017
63%
Gross profit on cost
Gross profit on sales
Operating expenses on sales
Operating profit on sales
Return on owner's equity
Current ratio
50%
18%
19,2%
23%
1,9:1
0,9:1
2,5:1
12%
2,1:1
1:1
3,3.1
12%
Acid test ratio
Solvency ratio
Interest on fixed deposits
REQUIRED:
The owner of Mashonisa Traders is happy about the liquidity position
of the business. Quote TWO relevant financial indicators with figures
to support her opinion.
3.1
The manager is concerned about the mark up % achieved by the
business. Quote ONE relevant indicator to support her concern. And
explain what caused the business not to achieve its targeted mark up.
Mention TWO points.
3.2
The owner of the business is not satisfied by the operating efficiency
of the business. Quote TW0 relevant financial indicators with
figures to support his opinion
3.3
3.4
The manager feels that the owner must be satisfied with the returns
he is earning in this business. Do you agree with this opinion?
o Explain by quoting ONE financial Indicator to support your answer.
Also quote figures to support your answer.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 5 steps
Recommended textbooks for you
Corporate Financial Accounting
Accounting
ISBN:
9781305653535
Author:
Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:
Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Corporate Financial Accounting
Accounting
ISBN:
9781305653535
Author:
Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:
Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Financial & Managerial Accounting
Accounting
ISBN:
9781337119207
Author:
Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:
Cengage Learning
Financial Accounting: The Impact on Decision Make…
Accounting
ISBN:
9781305654174
Author:
Gary A. Porter, Curtis L. Norton
Publisher:
Cengage Learning
Survey of Accounting (Accounting I)
Accounting
ISBN:
9781305961883
Author:
Carl Warren
Publisher:
Cengage Learning