1. Calculate the cash operating cycle of Stone Limited for the year ended 30 April, 2018 and 2019. 2. Calculate the comparative ratios for Stone limited for the year ended 30 April 2019. (to two decimal places where appropriate). 3. Based on the result of the previous year end and the industry average. Draft a report addressed to the Board of Directors of Stone Limited analysing the performance of the company for the year 2019
1. Calculate the cash operating cycle of Stone Limited for the year ended 30 April, 2018 and 2019. 2. Calculate the comparative ratios for Stone limited for the year ended 30 April 2019. (to two decimal places where appropriate). 3. Based on the result of the previous year end and the industry average. Draft a report addressed to the Board of Directors of Stone Limited analysing the performance of the company for the year 2019
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
1. Calculate the cash operating cycle of Stone Limited for the year ended 30 April, 2018 and 2019.
2. Calculate the comparative ratios for Stone limited for the year ended 30 April 2019. (to two decimal places where appropriate).
3. Based on the result of the previous year end and the industry average. Draft a report addressed to the Board of Directors of Stone Limited analysing the performance of the company for the year 2019
Transcribed Image Text:Non-current liabilities:
10% loan notes
Current liabilities:
Bank overdraft
Trade payables
Taxation
2,200
15,000
600
16,000
Net profit margin
ROCE (Capital employed equity +loan notes)
Asset turnover
Current ratio
Quick ratio
Gross profit margin
Account receivables collection period
Account payables payment period
Inventory turnover (Times)
Gearing ratio
1,600
13,800
400
17,800
Total equity and liabilities
76,000
The ratios for Stone Limited have been calculated below based on the previous year
financial statement and latest industry average ratios.
Stone Ltd
30 April 2018
3.99%
16.69%
4.19 times
2.14:1
1.52:1
30.0%
40 days
17 days
13.9times
25.75%
12,000
15,800
62,400
Industry
Average
4.73%
18.50%
3.91times
1.90:1
1.27:1
35.23%
52days
49 days
18.3times
32.71%
Transcribed Image Text:The financial statements of Stone Limited for the most recent two years is shown below.
Extract from statement of profit or loss for the year ended 30 April
2019
2018
£'000
£'000
224,000
195,000
(169,200)
(136,500)
54,800
58,500
(32,700)
(38,040)
(10,900)
(12,680)
(1,900)
(1,380)
9,300
6,400
Revenue
Cost of sales
Gross profit
Administrative costs
Distribution cost
Finance cost -loan note interest
Statement of financial position as at 30 April.
Assets
Non-current assets
Current assets:
Inventory
Trade receivables
Cash balance
Total assets
Equity and liabilities
Ordinary share capital
Retained earnings
£'000
2019
12,800
24,600
1,600
£'000
37,000
39,000
76,000
16,000
26,200
42,200
2018
£'000 £'000
28,600
9,800
21,600
2,400
33,800
62,400
16,000
18,600
34,600
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