Ameer Ltd. is a manufacturing company that produces toys for kids. The company was able to sustain a reasonable amount of sales in the last two quarters despite the pandemic-crisis during the last year. However, the company has faced some serious liquidity problems due to delayed payments by the customers and lower sales in the first two quarters. Hence, the company is seriously thinking about revising its working capital standards by considering the changes in the market. The finance manager of the company is seeking your help in assessing the Average inventory processing period from the following financial data. The company had an opening stock of OMR 10,000 during the last year and made a total purchase of 27,000 OMR. The company has returned OMR 2000 worth material due to quality issues. During the last year, the business has paid OMR 3000 as wages and OMR 6000 as salaries. The company sold goods for a total amount of OMR 50,000 of which OMR 20,000 sales was on cash basis. Average debtors during the last year was 10,000 OMR, average creditors were 15,000 OMR and closing inventory was OMR 8,000. Choose Average Inventory Processing period of Ameer Ltd. from the following? 120.12 188.23 109.50 125.35

Ameer Ltd. is a manufacturing company that produces toys for kids. The company was able to sustain a reasonable amount of sales in the last two quarters despite the pandemic-crisis during the last year. However, the company has faced some serious liquidity problems due to delayed payments by the customers and lower sales in the first two quarters. Hence, the company is seriously thinking about revising its working capital standards by considering the changes in the market. The finance manager of the company is seeking your help in assessing the Average inventory processing period from the following financial data. The company had an opening stock of OMR 10,000 during the last year and made a total purchase of 27,000 OMR. The company has returned OMR 2000 worth material due to quality issues. During the last year, the business has paid OMR 3000 as wages and OMR 6000 as salaries. The company sold goods for a total amount of OMR 50,000 of which OMR 20,000 sales was on cash basis. Average debtors during the last year was 10,000 OMR, average creditors were 15,000 OMR and closing inventory was OMR 8,000. Choose Average Inventory Processing period of Ameer Ltd. from the following? 120.12 188.23 109.50 125.35

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

1. Business Organization Green Corporation (GC) is stock corporation engaged in the events management. The major customers of GC are companies engaged in concerts, trade fairs and expositions, weddings, corporate events and seminars in the different events centers in Metro Manila, Clark, Cebu and Davao. Due to the effects of the pandemic, GC would need to increase their capital to give them more funds to survive the economic challenges for the next 2-4 years. The original investors who control more than 50% of the stocks, fear that the company may not survive the pandemic if they did not increase their capital. The Board of Directors identified 3 options below to increase their capital and get additional funds: a. Enter into a joint venture with their competitor Blazing Company (BC). b. To sell additional preferred shares in the stock market. c. To sell additional common stocks in the stock market. Question: I. II. What option shall you recommend to your Board of Directors for the…
Athif trading company is a popular distributor in Salala, having operations in the entire Oman. Over these years, the company has gained a very good public opinion and quiet a big number of loyal customers. During the last year, the company has faced a serious liquidity crisis. The management of the company wants to check the liquidity ratios of the last year in order to plan for the current year. You are asked to help the management in computing the liquidity ratios. The Balance Sheet of Athif trading company for the year ending 31-12-2020 Equity and Liabilities OMR Assets OMR Equity Share Capital Capital Reserve 8% Loan on Mortgage Creditors Bank overdraft 40,000 Plant and Machinery 8.000| Land and Buildings 32,000 Furniture & Fixtures 16,000 Stock 12.000 Debtors Investments (Short-term) Cash in hand 24,000 40,000 16,000 12,000 12,000 4,000 12,000 Profit and Loss A/c 12,000 1,20,000 1,20,000 Choose the Current ratio and Quick ratio from the following? O Current ratio is 1.43 and…
Pfizer Pharmaceuticals, Inc. is facing difficulties due to longer average collection period as many of its customers are having liquidity issues and they are delaying payments well beyond the due dates. Furthermore, the bad debt ratio of the company is on the rise as lots of pharmaceutical companies have gone bankrupt or having financial difficulties. In order to address these issues, company is thinking to adopt stringent credit policy in order to reduce bad debt and average collection period. The Management has decided that it will not grant additional credit to any customer beyond 15 days past due on payments. However, such a change of policy has consequences, and it is expected that firm will reduce it current sales to $6.5 million (20% reduction from current level of sale). However, the policy will also help in reduction of bad debts losses by 4% (from 8% to 4%) and average collection period by 35 days (from 110 days to 75 days). The expected decrease in sales will result in…
Harder
As a firm grows, it must support increases in revenue with new investments in assets. The self-supporting growth model helps a firm assess how rapidly it can grow, while maintaining a balance between its cash outflows (increases in noncash assets) and inflows (funds resulting from increases in liabilities or equity). Consider this case: Green Moose Industries has no debt in its capital structure and has $300 million in assets. Its sales revenues last year were $210 million with a net income of $10 million. The company distributed $1.55 million as dividends to its shareholders last year. What is the firm’s self-supporting, growth rate? (Note: Do not round your intermediate calculations.) 2.90% 0.61% 4.00% 0.52% Which of the following are assumptions of the self-supporting growth model? Check all that apply. The firm must issue the same number of new common shares that it issued last year. Common stock is the firm’s only form of equity.…
Alcaraz Ltd manufactures tennis racquets which it supplies to most of the country’s sportingretailers.You are currently preparing an analysis of a new investment proposal where the internal rate ofreturn has been projected at 15%. The management board has stated that they should go aheadwith this project because the return is higher than the inflation rate, however you have advisedthat they need to compare this rather against the company’s weighted average cost of capital(WACC) before any final decision is made.Upon analysis of the company’s capital structure and latest financial statements as at 31 August2022 you have determined the following: ORDINARY EQUITYOrdinary share capital on the Statement of Financial Position is reflecting as R70 000 000 andconsists of 5 000 000 ordinary shares. The shares are currently trading at a discount of 20% on theJohannesburg Securities Exchange. The beta for the shares is a quarter of the market beta and theshares move in the opposite direction to…
Sola sa is a British company specialized in water supplies. It has a big activity, and wishes to reduce its risks. It operates in a challenging environment, and subject to fluctuations in prices on financial markets. It imports some raw materials from China, and sells to France and other European countries. Its Financial manager gives you the followings : Loans borrowed : GBP 100,000 at 5% Loans to employees : GBP 75,000 at 3% Money at bank: GBP 450,000 at 2% Calculate the net interest margin for Sola? What are the major risks facing the company? Could you identify the related examples?
Athif trading company is a popular distributor in Salala, having operations in the entire Oman. Over these years, the company has gained a very good public opinion and quiet a big number of loyal customers. During the last year, the company has faced a serious liquidity crisis. The management of the company wants to check the liquidity ratios of the last year in order to plan for the current year. You are asked to help the management in computing the liquidity ratios. The Balance Sheet of Athif trading company for the year ending 31-12-2020 Equity and Liabilities OMR OMR Equity Share Capita Capital Reserve s Loan on Mortgage 40000Plant and Machinery 80o0Land and Buildings 32.000Furniture & Fixtures 16000 Stock 24,000 40,000 Creditor 12,000 Bank overdraft 12,000 Debtors investments (Short-term) 4.000 Teanh in hand 12.000 12,000 Profit and Los A/c 12,00 1,20,000 1.20,000 Choose the Current ratio and Quick ratio from the following? O a Current ratio is 1.43 and Quick ratio is 240 Ob.…