Based on the financial statements, evaluate the company’s financial stability in 2020 as compared to 2019 based on the current ratio, quick ratio and debt 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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Based on the financial statements, evaluate the company’s financial stability in 2020 as compared to 2019 based on the current ratio, quick ratio and debt ratio.

I STATEMENTS OF FINANCIAL POSITION
As at 30 September 2020
NOTE
GROUP
COMPANY
2020
2019
2020
2019
$
ASSETS
Current assets
Cash and bank balances
4
12,921,780
15,792,071
11,658,583
15,231,736
Trade and other receivables
5
1,153,213
1,584,079
718,325
387,166
Amount due from subsidiaries
13
2,778,865
3,912,153
Inventories
479,518
516,640
60,617
69,650
Grant receivables
19
380,086
283,218
Other assets
10
136,642
482,027
Total current assets
15,071,239
18,374,817
15,499,608
19,600,705
Non-current assets
Other receivables
193,857
1,065,163
489,040
Goodwill
7
Intangible assets
8
564,971
633,451
Plant and equipment
3,063,455
2,535,334
1,188,392
541,294
Right-of-use assets
12
4,756,005
1,425,503
Other assets
10
44,171
Investment in subsidiaries
11
100,105
100,105
Total non-current assets
8,578,288
4,278,119
2,714,000
1,130,439
Total assets
23,649,527
22,652,936
18,213,608
20,731,144
Transcribed Image Text:I STATEMENTS OF FINANCIAL POSITION As at 30 September 2020 NOTE GROUP COMPANY 2020 2019 2020 2019 $ ASSETS Current assets Cash and bank balances 4 12,921,780 15,792,071 11,658,583 15,231,736 Trade and other receivables 5 1,153,213 1,584,079 718,325 387,166 Amount due from subsidiaries 13 2,778,865 3,912,153 Inventories 479,518 516,640 60,617 69,650 Grant receivables 19 380,086 283,218 Other assets 10 136,642 482,027 Total current assets 15,071,239 18,374,817 15,499,608 19,600,705 Non-current assets Other receivables 193,857 1,065,163 489,040 Goodwill 7 Intangible assets 8 564,971 633,451 Plant and equipment 3,063,455 2,535,334 1,188,392 541,294 Right-of-use assets 12 4,756,005 1,425,503 Other assets 10 44,171 Investment in subsidiaries 11 100,105 100,105 Total non-current assets 8,578,288 4,278,119 2,714,000 1,130,439 Total assets 23,649,527 22,652,936 18,213,608 20,731,144
NOTE
GROUP
COMPANY
2020
2019
2020
2019
$
2$
LIABILITIES AND EQUITY
Current liabilities
Loans and borrowings – current portion
14
1,465,528
1,465,528
Trade and other payables
15
5,216,427
4,603,257
2,527,257
3,001,685
Contract liabilities
16
271,153
626,733
Lease liabilities
12
3,264,757
1,523,439
Amount due to holding company
13
10,047
44,021
5,264
44,021
Provisions
17
265,341
170,223
223,897
133,274
Deferred grant income
19
556,181
388,628
Income tax payable
17,093
17,093
Total current liabilities
11,066,527
5,461,327
6,134,013
3,178,980
Non-current liabilities
Provisions
17
150,808
271,403
38,808
161,327
Lease liabilities
12
2,811,945
302,156
Loans and borrowings
14
2,812,500
2,812,500
Total non-current liabilities
5,775,253
271,403
3,153,464
161,327
Equity
Share capital
18
25,181,005
25,181,005
25,181,005
25,181,005
Capital reserve
20
(695,938)
(695,938)
2,063,751
2,063,751
Accumulated losses
(17,661,580)
(7,549,435)
(18,318,625)
(9,853,919)
Translation reserve
20
(15,740)
(15,426)
Total equity
6,807,747
16,920,206
8,926,531
17,390,837
Total liabilities and equity
23,649,527
22,652,936
18,213,608
20,731,144
Transcribed Image Text:NOTE GROUP COMPANY 2020 2019 2020 2019 $ 2$ LIABILITIES AND EQUITY Current liabilities Loans and borrowings – current portion 14 1,465,528 1,465,528 Trade and other payables 15 5,216,427 4,603,257 2,527,257 3,001,685 Contract liabilities 16 271,153 626,733 Lease liabilities 12 3,264,757 1,523,439 Amount due to holding company 13 10,047 44,021 5,264 44,021 Provisions 17 265,341 170,223 223,897 133,274 Deferred grant income 19 556,181 388,628 Income tax payable 17,093 17,093 Total current liabilities 11,066,527 5,461,327 6,134,013 3,178,980 Non-current liabilities Provisions 17 150,808 271,403 38,808 161,327 Lease liabilities 12 2,811,945 302,156 Loans and borrowings 14 2,812,500 2,812,500 Total non-current liabilities 5,775,253 271,403 3,153,464 161,327 Equity Share capital 18 25,181,005 25,181,005 25,181,005 25,181,005 Capital reserve 20 (695,938) (695,938) 2,063,751 2,063,751 Accumulated losses (17,661,580) (7,549,435) (18,318,625) (9,853,919) Translation reserve 20 (15,740) (15,426) Total equity 6,807,747 16,920,206 8,926,531 17,390,837 Total liabilities and equity 23,649,527 22,652,936 18,213,608 20,731,144
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