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RM RM RM RM Statements of Financial Position Non- current Assets 80,000 180,000 Current Assets Inventory Receivables 30,000 6,000 4,000 50,000 20,000 10.000 Bank 40,000 120,000 80,000 260,000 Total Asset Capital and reserves Ordinary share capital Accumulated profits 60,000 160,000 20,000 80,000 75,000 235,000 Non Current liabilities 10% Loan stock 30,000 5,000 Current liabilities Payables Total Capital and reserves 10,000 120,000 20,000 260,000

RM RM RM RM Statements of Financial Position Non- current Assets 80,000 180,000 Current Assets Inventory Receivables 30,000 6,000 4,000 50,000 20,000 10.000 Bank 40,000 120,000 80,000 260,000 Total Asset Capital and reserves Ordinary share capital Accumulated profits 60,000 160,000 20,000 80,000 75,000 235,000 Non Current liabilities 10% Loan stock 30,000 5,000 Current liabilities Payables Total Capital and reserves 10,000 120,000 20,000 260,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question 2

Alex is currently considering to invest his money in one of the companies between Company A and Company B. The summarized final accounts of the companies for their last completed financial year are as follows:

Refer to the pic attached.

Based on the pic,

Part (a)

  • Gross Profit Margin
  • Net Profit Margin
  • Inventory Turnover Period (days)
  • Receivables Collection Period (days)
  • Payables Payment Period (days)
  • Current Ratio
  • Quick Ratio

 

Required:

b. Comment on each of the ratios calculated in part (a) above. 

RM RM RM RM Statements of Financial Position Non- current Assets 80,000 180,000 Current Assets Inventory Receivables 30,000 6,000 4,000 50,000 20,000 10,000 Bank 40,000 120,000 80,000 260,000 Total Asset Capital and reserves Ordinary share capital Accumulated profits 60,000 20,000 80,000 160,000 75,000 235,000 Non Current liabilities 10% Loan stock 30,000 5,000 Current liabilities Payables Total Capital and reserves 10,000 20,000 120,000 260,000
Transcribed Image Text:RM RM RM RM Statements of Financial Position Non- current Assets 80,000 180,000 Current Assets Inventory Receivables 30,000 6,000 4,000 50,000 20,000 10,000 Bank 40,000 120,000 80,000 260,000 Total Asset Capital and reserves Ordinary share capital Accumulated profits 60,000 20,000 80,000 160,000 75,000 235,000 Non Current liabilities 10% Loan stock 30,000 5,000 Current liabilities Payables Total Capital and reserves 10,000 20,000 120,000 260,000
Statements of Comprehensive Income Company A RM Company B RM RM RM Sales 160,000 (120,000) 40,000 240,000 (180,000) 60,000 Cost of sales Gross profit Less: 18,000 Administration expenses Selling and distribution 12,000 6,000 9,500 expenses Other operating 10,000 14,000 expenses Financial expenses 3,000 500 (31,000) 9,000 (42,000) 18,000 Net profit
Transcribed Image Text:Statements of Comprehensive Income Company A RM Company B RM RM RM Sales 160,000 (120,000) 40,000 240,000 (180,000) 60,000 Cost of sales Gross profit Less: 18,000 Administration expenses Selling and distribution 12,000 6,000 9,500 expenses Other operating 10,000 14,000 expenses Financial expenses 3,000 500 (31,000) 9,000 (42,000) 18,000 Net profit
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