2. Faraz, a trader, proviđed the following information for the year ended 31 December 2023.Sales200 000Purchases110 000Opening inventoryClosing inventoryExpensesClosing Capital10 00020 00050 00080 00REQUIREDa. Calculate the following ratios for 2023. Show detailed workings on your answer script.20222023(i) Gross profit/sales37.5%(ii) Net profit/sales(iii) Net profit/closing capital20%50%(iv) Rate of inventory turnover6.7 times

In this case first net income would be calculated for 2023 as shown below: Calculate net income…

Answered: Calculate the following ratios for…

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Calculate the following ratios for 2023. Show detailed workings on your answer script. 2022 2023

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

2. Faraz, a trader, proviđed the following information for the year ended 31 December 2023.
Sales
200 000
Purchases
110 000
Opening inventory
Closing inventory
Expenses
Closing Capital
10 000
20 000
50 000
80 00
REQUIRED
a. Calculate the following ratios for 2023. Show detailed workings on your answer script.
2022
2023
(i) Gross profit/sales
37.5%
(ii) Net profit/sales
(iii) Net profit/closing capital
20%
50%
(iv) Rate of inventory turnover
6.7 times

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