Calculate the following ratios Return on Capital Employed (%) Gross profit percentage (%) Operating profit percentage(%) Assets turnover ratio ( use capital employed) (times) Quick/Acid test ratio (times) Debtors collection period (days) Earning per share (pence)
ABC Ltd
20X9 20X8
ASSETS £,000 £,000
Non-current assets
Machinery 2,100 2,240
Motor Vehicles 394 441
Investments 340 340
2,834 3,021
Current assets
Inventory 563 398
Trade receivables 1,181 912
Cash 9 11
1,753 1,321
Total assets 4,587 4,342
EQUITY AND LIABILITIES
Equity
Share capital 3,000 3,000
3,353 3,262
Non-current liabilities
Long-term loan 600 600
Current liabilities
Trade payables 498 398
Accrued Expenses 15 12
Tax payable 24 29
Short term borrowing 97 41
480 634
Total equity and liabilities 4,587 4,342
ABC Ltd
Statement of Profit or Loss
20X9 20X8
£,000 £,000 £,000 £,000
Revenue 3,461 3,296
Opening inventory 398 253
Purchases 2,623 2,835
Closing inventory (563) (398)
Cost of goods sold (2,458) (2,240)
Gross profit 1,003 1,056
Distribution costs:
Irrecoverable debt 17 32
Advertising 24 94
(228) (365)
Administrative expenses:
Rent 60 60
Salaries and wages 362 316
Miscellaneous expenses 177 159
(599) (535)
Operating profit 176 156
Dividend received -- 51
Finance cost (60) (53)
Profit before tax 116 154
Income tax expenses (25) (39)
Profit after
Required
- Calculate the following ratios
- Return on Capital Employed (%)
- Gross profit percentage (%)
- Operating profit percentage(%)
- Assets turnover ratio ( use capital employed) (times)
- Quick/Acid test ratio (times)
- Debtors collection period (days)
- Earning per share (pence)
State clearly the formulae used for each ratio and show all workings.
c- Based on your calculation and the information available ,write a brief report on the financial performance and position of ABC Ltd.
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