Capital 1 January 2019 350 000 Drawings 20 000 Sales (70% on credit) 950 000 Gross profit 250 000 Total expenses 80 000 Bank favourable 26 000 Net profit 74 000 Trade creditors 26 000 Property, plant and equipment 350 000 Fixed deposit 20 000 Inventory 72 000 Trade Debtors 80 000 Mortgage Loan 100 000 Calculate the following ratios and explain what each ratio means in relation to the industry average given in brackets. Show your calculations as marks will be awarded for these. Round off to 2 decimal places. Q.2.1.4 Current ratio (2:1).
Capital 1 January 2019 350 000 Drawings 20 000 Sales (70% on credit) 950 000 Gross profit 250 000 Total expenses 80 000 Bank favourable 26 000 Net profit 74 000 Trade creditors 26 000 Property, plant and equipment 350 000 Fixed deposit 20 000 Inventory 72 000 Trade Debtors 80 000 Mortgage Loan 100 000 Calculate the following ratios and explain what each ratio means in relation to the industry average given in brackets. Show your calculations as marks will be awarded for these. Round off to 2 decimal places. Q.2.1.4 Current ratio (2:1).
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter4: The Balance Sheet And The Statement Of Shareholders' Equity
Section: Chapter Questions
Problem 16P: Ratios Analyses: McCormick Refer to the information for McCormick above. Additional information for...
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Capital 1 January 2019 |
350 000 |
Drawings |
20 000 |
Sales (70% on credit) |
950 000 |
Gross profit |
250 000 |
Total expenses |
80 000 |
Bank favourable |
26 000 |
Net profit |
74 000 |
Trade creditors |
26 000 |
Property, plant and equipment |
350 000 |
Fixed deposit |
20 000 |
Inventory |
72 000 |
Trade Debtors |
80 000 |
Mortgage Loan |
100 000 |
Calculate the following ratios and explain what each ratio means in relation to the industry average given in brackets. Show your calculations as marks will be awarded for these. Round off to 2 decimal places.
Q.2.1.4 |
Current ratio (2:1). |
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