ABC Inc. is a Corporation with a focus on Garment and textile manufacturing in the UAE. They are now looking to finance their new project, are looking for a bank to give them a loan. Calculate the following ratios for both 2018 and 2019, interpret and analyze them:Current RatioAcid Test RatioTimes Interest Earned Ratio Standalone statement of financial positionAs at 31 December20192018NoteAEDAEDASSETSNon-current assetProperty and equipment41,012,9841,213,595Investments in subsidiaries1,343,5822,356,5662.21,213,595Current assetsInventories5,529,691193,441,50352,580,86333,455,65924,349,497309,357,213310,570,808Trade and other receivables6.Due from related partiesLoan to related parties179,413,089121,670,89280,115,25326,318,7391111Cash and bank balances7407,517,973409,874,539Total assetsEQUITY AND LIABILITIESEQUITYShare capitalRetained earningsTotal equity3,900,000358,743,2393,900,000279,803,469283,703,469362,643,239LIABILITIESNon-current liabilities252,073252,073Provision for employees' end of service benefits355,785355,785Current liabilitiesTrade and other payablesDue to a related partyBank borrowings101,123,52326,729,06419,022,92846,875,51547,231,300409,874,5396,079,56820,415,438120,26026,615,26626,867,339310,570,8081117Total liabilitiesTotal equity and liabilities Standalone statement of comprehensive incomeYear ended 31 December20192018NoteAEDAED967,215,339(862,141,258)105,074,081Revenue12813,481,889Cost of sales13(722,094,232)91,387,657Gross profitAdministrative and selling expenses14(30,183,413)978,095(27,340,230)11,221,861Other incomeReversal of/(provision for) impairment of tradereceivables15(7,716,272)67,553,0166.4,167,78380,036,546Operating profitFinance cost18(1,097,922)1,146(1,096,776)(545,088)3,548(541,540)Finance income18Finance cost - net18Profit for the year78,939,77067,011,476Other comprehensive income for the yearTotal comprehensive income for the year78,939,77067,011,476

Ratio analysis is very important technique of management accounting, in which decisions are being…

ABC Inc. is a Corporation with a focus on Garment and textile manufacturing in the UAE. They are now looking to finance their new project, are looking for a bank to give them a loan. Calculate the following ratios for both 2018 and 2019, interpret and analyze them: Current Ratio Acid Test Ratio Times Interest Earned Ratio

ABC Inc. is a Corporation with a focus on Garment and textile manufacturing in the UAE. They are now looking to finance their new project, are looking for a bank to give them a loan. Calculate the following ratios for both 2018 and 2019, interpret and analyze them: Current Ratio Acid Test Ratio Times Interest Earned Ratio

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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