1 Question 1. The following summarised figures have been taken from the financial statements of Fileas Ltd: ● Statements of Financial Position Non-current assets ● Current assets Total Assets Equity Non-current liabilities Income statements Current liabilities Total Equity & Liabilities Sales revenue Cost of sales Gross profit Operating expenses Operating profit Finance costs 31/12/2023 £'000 24,960 1,300 26,260 14,420 9,020 2,820 26,260 Year ended 31/12/2023 £'000 9,600 (4,140) 5,460 Profit before taxation Taxation Net profit (profit after tax) Required: (a) Calculate the following ratios for Fileas Ltd for both years: . Return on equity . Return on capital employed (2,880) 2,580 (700) 1,880 (760) 1,120 31/12/2022 £'000 24,400 1,200 25,600 Gearing ratio Current ratio Operating profit margin You should give the definition of the ratio, as well as your calculation. 13,860 10,700 1,040 25,600 Year ended 31/12/2022 £'000 10,240 (4,240) 6,000 (3,140) 2,860 (740) 2,120 (820) 1,300 (b) What do these summarised accounts and ratios tell you about Fileas Ltd's profitability, liquidity and long-term solvency? Provide brief comments addressing each of these matters to direct company management's attention to areas that need consideration.
1 Question 1. The following summarised figures have been taken from the financial statements of Fileas Ltd: ● Statements of Financial Position Non-current assets ● Current assets Total Assets Equity Non-current liabilities Income statements Current liabilities Total Equity & Liabilities Sales revenue Cost of sales Gross profit Operating expenses Operating profit Finance costs 31/12/2023 £'000 24,960 1,300 26,260 14,420 9,020 2,820 26,260 Year ended 31/12/2023 £'000 9,600 (4,140) 5,460 Profit before taxation Taxation Net profit (profit after tax) Required: (a) Calculate the following ratios for Fileas Ltd for both years: . Return on equity . Return on capital employed (2,880) 2,580 (700) 1,880 (760) 1,120 31/12/2022 £'000 24,400 1,200 25,600 Gearing ratio Current ratio Operating profit margin You should give the definition of the ratio, as well as your calculation. 13,860 10,700 1,040 25,600 Year ended 31/12/2022 £'000 10,240 (4,240) 6,000 (3,140) 2,860 (740) 2,120 (820) 1,300 (b) What do these summarised accounts and ratios tell you about Fileas Ltd's profitability, liquidity and long-term solvency? Provide brief comments addressing each of these matters to direct company management's attention to areas that need consideration.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:1
Question 1.
The following summarised figures have been taken from the financial statements of Fileas Ltd:
●
Statements of Financial
Position
Non-current assets
●
Current assets
Total Assets
Equity
Non-current liabilities
Income statements
Current liabilities
Total Equity & Liabilities
Sales revenue
Cost of sales
Gross profit
Operating expenses
Operating profit
Finance costs
31/12/2023
£'000
24,960
1,300
26,260
14,420
9,020
2,820
26,260
Year ended
31/12/2023
£'000
9,600
(4,140)
5,460
Profit before taxation
Taxation
Net profit (profit after tax)
Required:
(a) Calculate the following ratios for Fileas Ltd for both years:
. Return on equity
. Return on capital employed
(2,880)
2,580
(700)
1,880
(760)
1,120
31/12/2022
£'000
24,400
1,200
25,600
Gearing ratio
Current ratio
Operating profit margin
You should give the definition of the ratio, as well as your calculation.
13,860
10,700
1,040
25,600
Year ended
31/12/2022
£'000
10,240
(4,240)
6,000
(3,140)
2,860
(740)
2,120
(820)
1,300
(b) What do these summarised accounts and ratios tell you about Fileas Ltd's profitability, liquidity and long-term solvency?
Provide brief comments addressing each of these matters to direct company management's attention to areas that need
consideration.
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