Below are the ratio results for Abcom for the year 2022. Performance Operating margin -18.66% Asset turnover 0.16 Return on Capital Employed -7.64% Working capital Inventory days 88.88 days Debtor days 46.18 days Trade creditor days 68.11 days Liquidity Current ratio 0.30 Acid test 0.25 Solvency Interest cover -2.56 Shareholder's view Return on equity 7.16% Required; Analyse and interpret the meaning of these results.

Below are the ratio results for Abcom for the year 2022. Performance Operating margin -18.66% Asset turnover 0.16 Return on Capital Employed -7.64% Working capital Inventory days 88.88 days Debtor days 46.18 days Trade creditor days 68.11 days Liquidity Current ratio 0.30 Acid test 0.25 Solvency Interest cover -2.56 Shareholder's view Return on equity 7.16% Required; Analyse and interpret the meaning of these results.

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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Question

Below are the ratio results for Abcom for the year 2022.

Performance

Operating margin -18.66%

Asset turnover 0.16

Return on Capital Employed -7.64%

Working capital

Inventory days 88.88 days

Debtor days 46.18 days

Trade creditor days 68.11 days

Liquidity

Current ratio 0.30

Acid test 0.25

Solvency

Interest cover -2.56

Shareholder's view

Return on equity 7.16%

Required;

Analyse and interpret the meaning of these results.

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