We will use the following information for the questions 1-6. Please use the formulas we have used in this course. Please do not put % sign in your answers and use ONLY full stop and NOT a comma to indicate a decimal. Consider the Company X. Company X has the following financials: Total Revenue: 100 000 Cost of Revenue : 40 000 Gross Profit: 60 000 Cost of finance: 10 000 Operating profit: 35 000 Net Income Before Tax: 30 000 Tax: 10 000 Net profit: 20 000 Total Current Assets: 200 000 Inventory: 80 000 Accounts Receivable: 50 000 Total Non-Current Assets: 300 000 Total Current Liabilities: 100 000 Accounts Payable: 80 000 Total Non-Current Liabilities: 300 000 Total Shareholder Equity: 100 000 Cash receipts (from Cash from Operating Activities): 20 000 Questions  In question 1, please calculate the Return on Capital Employed (ROCE), in % Please use the financials from the first question to calculate the Quick ratio. Please use the information from the first question to calculate the Receivables days

Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter9: Accounting For Receivables
Section: Chapter Questions
Problem 4TP: You are considering two possible companies for investment purposes. The following data is available...
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We will use the following information for the questions 1-6. Please use the formulas we have used in this course. Please do not put % sign in your answers and use ONLY full stop and NOT a comma to indicate a decimal.

Consider the Company X. Company X has the following financials:

  • Total Revenue: 100 000
  • Cost of Revenue : 40 000
  • Gross Profit: 60 000
  • Cost of finance: 10 000
  • Operating profit: 35 000
  • Net Income Before Tax: 30 000
  • Tax: 10 000
  • Net profit: 20 000
  • Total Current Assets: 200 000
  • Inventory: 80 000
  • Accounts Receivable: 50 000
  • Total Non-Current Assets: 300 000
  • Total Current Liabilities: 100 000
  • Accounts Payable: 80 000
  • Total Non-Current Liabilities: 300 000
  • Total Shareholder Equity: 100 000
  • Cash receipts (from Cash from Operating Activities): 20 000

Questions 

  1. In question 1, please calculate the Return on Capital Employed (ROCE), in %
  2. Please use the financials from the first question to calculate the Quick ratio.
  3. Please use the information from the first question to calculate the Receivables days
  4. Considering the information in the first question, calculate the inventory days
  5. Considering the information in the first question, calculate the debt-to-equity, %
  6. Considering the information in the first question, calculate the interest cover
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