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Suppose you have been provided with the following information which was extracted from records of ABC Ltd. Balance Sheet Statement of Financial Position - ABC Ltd as at 31 December 2021 2020 200 000 200 000 Share capital (par value N$ 2) Retained earnings Long term liabilities. 510 000 490 000 424 000 250 000 Creditas Trade and other payables Total equity and liabilities 66 000 1200 000. 60 000 1 000 000 Non-current assets 1480 000 1 200 000 Plant and equipment at cost Accumulat depreciation (560 000) (500 000) Net non-current assets 920 000 700 000 Current assets Inventory 150 000 150 000 Trade and other receivables obs 120.000 100 000 Cash 10 000 50.000 300 000 Total current assets 280 000 Total Assets 1 200 000 1 000 000 Income Statement Statement of Comprehensive Income for the years ended 31 December 2022 2020 Sales (40% is cash sales) 1 200 000 1080 000 Cost of sales 900 000 842.000 Gross profit 300 000 238 000 Operating expenses 114 000 104 000 Depreciation 60 000 32 000 Net profit before interest and taxes 126 000 102 000 Interest 39 600 23 000 Net profit before taxes 86 400 79 000 Taxes @ 30% 25 920 23 700 Net profit after tax 60 480 55 300 REQUIRED: Compute and comment on the following ratios for both years. to H

Suppose you have been provided with the following information which was extracted from records of ABC Ltd. Balance Sheet Statement of Financial Position - ABC Ltd as at 31 December 2021 2020 200 000 200 000 Share capital (par value N$ 2) Retained earnings Long term liabilities. 510 000 490 000 424 000 250 000 Creditas Trade and other payables Total equity and liabilities 66 000 1200 000. 60 000 1 000 000 Non-current assets 1480 000 1 200 000 Plant and equipment at cost Accumulat depreciation (560 000) (500 000) Net non-current assets 920 000 700 000 Current assets Inventory 150 000 150 000 Trade and other receivables obs 120.000 100 000 Cash 10 000 50.000 300 000 Total current assets 280 000 Total Assets 1 200 000 1 000 000 Income Statement Statement of Comprehensive Income for the years ended 31 December 2022 2020 Sales (40% is cash sales) 1 200 000 1080 000 Cost of sales 900 000 842.000 Gross profit 300 000 238 000 Operating expenses 114 000 104 000 Depreciation 60 000 32 000 Net profit before interest and taxes 126 000 102 000 Interest 39 600 23 000 Net profit before taxes 86 400 79 000 Taxes @ 30% 25 920 23 700 Net profit after tax 60 480 55 300 REQUIRED: Compute and comment on the following ratios for both years. to H

Corporate Financial Accounting
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 14.6BE
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QUESTION 1 Suppose you have been provided with the following information which was extracted from records of ABC Ltd. Balance Sheet Statement of Financial Position - ABC Ltd as at 31 December 2021 2020 200 000 200 000 Share capital (par value N$ 2) Retained earnings 510 000 490 000 Long term liabilities. 424 000 250 000 Creditors 66 000 Trade and other payables Total equity and liabilities 60 000 1 000 000 1 200 000. Non-current assets 1480 000 Plant and equipment at cost Accumulated depreciation Net non-current assets. 1 200 000 (500 000) (560 000) 920 000 700 000 Current assets Inventory 150 000 150 000 Trade and other receivables oblisys. 120.000 Cash 10 000 280 000 100 000 50.000 300 000 Total current assets Total Assets 1 200 000 1 000 000 Income Statement Statement of Comprehensive Income for the years ended 31 December 2022 2020 Sales (40% is cash sales) 1 200 000 Cost of sales 1080 000 842 000 900 000 Gross profit 300 000 238 000 Operating expenses 114 000 104 000 Depreciation 60 000 32 000 Net profit before interest and taxes 126 000 102 000 Interest 39 600 23 000 Net profit before taxes 79 000 86 400 25 920 Taxes @ 30% 23 700 Net profit after tax 60 480 55 300 REQUIRED: Compute and comment on the following ratios for both years. 1 HP Ho
Transcribed Image Text:QUESTION 1 Suppose you have been provided with the following information which was extracted from records of ABC Ltd. Balance Sheet Statement of Financial Position - ABC Ltd as at 31 December 2021 2020 200 000 200 000 Share capital (par value N$ 2) Retained earnings 510 000 490 000 Long term liabilities. 424 000 250 000 Creditors 66 000 Trade and other payables Total equity and liabilities 60 000 1 000 000 1 200 000. Non-current assets 1480 000 Plant and equipment at cost Accumulated depreciation Net non-current assets. 1 200 000 (500 000) (560 000) 920 000 700 000 Current assets Inventory 150 000 150 000 Trade and other receivables oblisys. 120.000 Cash 10 000 280 000 100 000 50.000 300 000 Total current assets Total Assets 1 200 000 1 000 000 Income Statement Statement of Comprehensive Income for the years ended 31 December 2022 2020 Sales (40% is cash sales) 1 200 000 Cost of sales 1080 000 842 000 900 000 Gross profit 300 000 238 000 Operating expenses 114 000 104 000 Depreciation 60 000 32 000 Net profit before interest and taxes 126 000 102 000 Interest 39 600 23 000 Net profit before taxes 79 000 86 400 25 920 Taxes @ 30% 23 700 Net profit after tax 60 480 55 300 REQUIRED: Compute and comment on the following ratios for both years. 1 HP Ho
1.1. 1.2. 1.3. 1.4. 1.5. 1.6. 1.7. 1.8. Current ratio Acid test ratio Total debt ratio Inventory turnover ratio Days sales in inventory Total asset turnover Net profit margin Gross profit margin 20 para
Transcribed Image Text:1.1. 1.2. 1.3. 1.4. 1.5. 1.6. 1.7. 1.8. Current ratio Acid test ratio Total debt ratio Inventory turnover ratio Days sales in inventory Total asset turnover Net profit margin Gross profit margin 20 para
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