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According to the information available in Income and Financial position statements (Image), calculate the following ratios for the business Competitors Average: - Net profit margin 31% - Gross profit margin 54% - Current ratio 2.87x - Acid test ratio 1.35x - Accounts receivable collection period 50 days - Accounts payable payment period 72 days

According to the information available in Income and Financial position statements (Image), calculate the following ratios for the business Competitors Average: - Net profit margin 31% - Gross profit margin 54% - Current ratio 2.87x - Acid test ratio 1.35x - Accounts receivable collection period 50 days - Accounts payable payment period 72 days

FINANCIAL ACCOUNTING
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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According to the information available in Income and Financial position statements (Image), calculate the following ratios for the business Competitors Average:


- Net profit margin 31%
- Gross profit margin 54%
- Current ratio 2.87x
- Acid test ratio 1.35x
- Accounts receivable collection period 50 days
- Accounts payable payment period 72 days 

Income Statement Income Statement Particulars Amount Assets: Amount Sales Less: Cost of goods sold Gross profit Less: Repairs Wage expense Rent expense Bank Cash Accounts receivable Inventory Van Motor vehicle Laptop 3,900 2,100 1,800 3,080 7,120 £ £ £ 400 £ 250 £ 80 £ 3,000 2,500 1,000 £ 820 1,000 £ Add: ТOTAL £ 17,350 Rent received 500 Liabilities and Capital: Accounts payable Capital Add: Net income Less: Drawings Net income 400 2,350 16,200 £ 400 1,600 17,350 TOTAL £
Transcribed Image Text:Income Statement Income Statement Particulars Amount Assets: Amount Sales Less: Cost of goods sold Gross profit Less: Repairs Wage expense Rent expense Bank Cash Accounts receivable Inventory Van Motor vehicle Laptop 3,900 2,100 1,800 3,080 7,120 £ £ £ 400 £ 250 £ 80 £ 3,000 2,500 1,000 £ 820 1,000 £ Add: ТOTAL £ 17,350 Rent received 500 Liabilities and Capital: Accounts payable Capital Add: Net income Less: Drawings Net income 400 2,350 16,200 £ 400 1,600 17,350 TOTAL £
Adjusted Trial balance Particulars Debit Credit £ 3,080.00 £ 7,120.00 £ 3,000.00 £ 2,500.00 £ 1,000.00 Bank Cash Van Motor vehicle Laptop Capital £16,200.00 Accounts receivable 400.00 Accounts payable £ 2,350.00 Purchases £ 2,450.00 Sales £ 3,900.00 Purchase return 100.00 Rent received 500.00 Repairs £ 80.00 Wage expense 820.00 £ 1,000.00 £ 1,600.00 Rent expense Drawings TOTAL £23,050.00 £23,050.00
Transcribed Image Text:Adjusted Trial balance Particulars Debit Credit £ 3,080.00 £ 7,120.00 £ 3,000.00 £ 2,500.00 £ 1,000.00 Bank Cash Van Motor vehicle Laptop Capital £16,200.00 Accounts receivable 400.00 Accounts payable £ 2,350.00 Purchases £ 2,450.00 Sales £ 3,900.00 Purchase return 100.00 Rent received 500.00 Repairs £ 80.00 Wage expense 820.00 £ 1,000.00 £ 1,600.00 Rent expense Drawings TOTAL £23,050.00 £23,050.00
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