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The Board of Directors were worried over the dwindling financial performance and precarious financial position of the Company. The company products were ageing; the economic depression biting harder as a result of the fluctuating exchange rate due to Brexit. The Company imports 60% of the goods sold in Garden City. The fluctuating exchange rate had affected the company’s importation. Consequently, the revenue of the Company dropped significantly. You are required to: A) Calculate the following ratios for the year ended September 30, 2015 and 2016 in Columnar form: i)Return on Capital employed ii) Total assets turnover iii)Quick Ratio iv) Debt Equity Ratio v)Fixed interest cover vi)Earnings Yeld vii) Price Earnings Ratio Viii) Dividend Yield

The Board of Directors were worried over the dwindling financial performance and precarious financial position of the Company. The company products were ageing; the economic depression biting harder as a result of the fluctuating exchange rate due to Brexit. The Company imports 60% of the goods sold in Garden City. The fluctuating exchange rate had affected the company’s importation. Consequently, the revenue of the Company dropped significantly. You are required to: A) Calculate the following ratios for the year ended September 30, 2015 and 2016 in Columnar form: i)Return on Capital employed ii) Total assets turnover iii)Quick Ratio iv) Debt Equity Ratio v)Fixed interest cover vi)Earnings Yeld vii) Price Earnings Ratio Viii) Dividend Yield

Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter5: Sales And Receivables
Section: Chapter Questions
Problem 57BE
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The Board of Directors were worried over the dwindling financial performance and precarious financial position of the Company. The company products were ageing; the economic depression biting harder as a result of the fluctuating exchange rate due to Brexit. The Company imports 60% of the goods sold in Garden City. The fluctuating exchange rate had affected the company’s importation. Consequently, the revenue of the Company dropped significantly. You are required to: A) Calculate the following ratios for the year ended September 30, 2015 and 2016 in Columnar form: i)Return on Capital employed ii) Total assets turnover iii)Quick Ratio iv) Debt Equity Ratio v)Fixed interest cover vi)Earnings Yeld vii) Price Earnings Ratio Viii) Dividend Yield
Extract of statement of Financial Position as of September 30 2016 2015 £' Million £' Million Assets Non- Current Assets at Cost 50,000 70,000 Less Accumulated Depreciation 10.000 12.000 Carrying Amount 40.000 57,500 Current Assets Inventory 32,500 7,500 Trade Receivables 20,000 5,000 Bank Balance 4.000 37.500 56,500 50.000 Total Assets 96,500 107,500 Equity and Liabilities Ordinary Share Capital @ 50pence each 23,000 23,000 Retained earnings 17,200 10,000 10% Loan notes 12,500 12,500 10% Redeemable Preference Shares 2.000 52,700 47,500 Current Liabilities Trade Payables 7,500 10,750 Taxation 24,000 16,000 Bank Overdrafts 12.300 33.250 43,800 60.000 Total Equity and Liabilities 96,500 107,500
Transcribed Image Text:Extract of statement of Financial Position as of September 30 2016 2015 £' Million £' Million Assets Non- Current Assets at Cost 50,000 70,000 Less Accumulated Depreciation 10.000 12.000 Carrying Amount 40.000 57,500 Current Assets Inventory 32,500 7,500 Trade Receivables 20,000 5,000 Bank Balance 4.000 37.500 56,500 50.000 Total Assets 96,500 107,500 Equity and Liabilities Ordinary Share Capital @ 50pence each 23,000 23,000 Retained earnings 17,200 10,000 10% Loan notes 12,500 12,500 10% Redeemable Preference Shares 2.000 52,700 47,500 Current Liabilities Trade Payables 7,500 10,750 Taxation 24,000 16,000 Bank Overdrafts 12.300 33.250 43,800 60.000 Total Equity and Liabilities 96,500 107,500
QUESTION 2 Tenderland Plc. has been trading in merchandise for several years in Garden City. The information below relates to the extracts from the financial statements for the past two years. Statement of Profit or loss and other Comprehensive income for the year ended September 30. 2016 2015 £' Million £'Million Revenue 100.000 160,000 Gross Profit 45,000 70,000 Administrative expenses 22,500 27,500 Finance cost 10% Loan Note Interest 1250 1250 23750 28.750 Operating Profit before Tax 21,250 41,250 Less: Taxation for the year 8.000 16.000 Less: Operating Profit for the Year 13.250 25.250 Dividends paid to Equity holders 6,050 8,550
Transcribed Image Text:QUESTION 2 Tenderland Plc. has been trading in merchandise for several years in Garden City. The information below relates to the extracts from the financial statements for the past two years. Statement of Profit or loss and other Comprehensive income for the year ended September 30. 2016 2015 £' Million £'Million Revenue 100.000 160,000 Gross Profit 45,000 70,000 Administrative expenses 22,500 27,500 Finance cost 10% Loan Note Interest 1250 1250 23750 28.750 Operating Profit before Tax 21,250 41,250 Less: Taxation for the year 8.000 16.000 Less: Operating Profit for the Year 13.250 25.250 Dividends paid to Equity holders 6,050 8,550
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