Sean Paul is a trader in vinyl records The firm has provided the following data for 2015 : Condensed Income Statement Condensed Balance Sheet Net Sales 1,600,500 Non Current Assets 2,400,000 Current Assets Cost of Goods Sold Stock 74,500 Opening stock 53,000 Debtors 220,000 Add Net purchases 410,000 Bank 100,500 Less Closing stock (74,500)(388,500) Receivables 32,000427,000Gross Profit 1,212,000 Total Assets 2,827,000Net Operating Expenses (515,500) Capital & Reserves PBIT 696,500 Ordinary Shares @ $1.00 500,000 Less interest -40,000 10% Preference Shares @ $1 450,000 Profit before tax 656,500 Reserves 550,000 Less tax (200,000) Retained Profits 531,5002,031,500PAT 456,500 Non-Current Liability Retained Earning b/d 300,000 10% Loan 400,000Total Profit for the Year 756,500 Less Transfer to Reserves (120,000) Current Liabilities Less Dividends Creditors 250,000 Ordinary (60,000) Accounts Payable 145,500395,500 Preference (45,000)(225,000) Total Equity & Liabilities 2,827,000Retained Earning c/d 531,500 Market Price per Share 3.75 The following comparative ratios relate to Sean Paul’s results in the preceding two years of 2013 and 2014Shaggy, a main competitor who is also a performer and a promoterThe average performance of the music industry: SHAGGYINDUSTRYSEAN PAUL 201320142015 Dividend Cover5.45 times5.00 times Debtors Turnover Period20. 58 days32.66 days Current Ratio2.89 : 12.50 : 1 Net Profit Margin22.34%25.50% Creditors Turnover1.04 times1.55 times Total Assets to Total Liabilities4.58 : 14.01 : 1 Earnings Per Share$0.68$.075 Gearing Ratio32.11%35.50% ROSE26.50%25.50% Times Interest Earned16.45 times15.25 times Question Compute the corresponding ratios for Sean Paul for 2015

B. liquid. solve. profit., asset mgmt & market inv 1. Trend analysis. Sean Paul has been…

Answered: Compute the corresponding ratios…

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

Sean Paul is a trader in vinyl records The firm has provided the following data for 2015 :

Condensed Income Statement Condensed Balance Sheet

Net Sales		1,600,500	Non Current Assets		2,400,000
			Current Assets
Cost of Goods Sold			Stock	74,500
Opening stock	53,000		Debtors	220,000
Add Net purchases	410,000		Bank	100,500
Less Closing stock	(74,500)	(388,500)	Receivables	32,000	427,000
Gross Profit		1,212,000	Total Assets		2,827,000
Net Operating Expenses		(515,500)
			Capital & Reserves
PBIT		696,500	Ordinary Shares @ $1.00	500,000
Less interest		-40,000	10% Preference Shares @ $1	450,000
Profit before tax		656,500	Reserves	550,000
Less tax		(200,000)	Retained Profits	531,500	2,031,500
PAT		456,500
			Non-Current Liability
Retained Earning b/d		300,000	10% Loan		400,000
Total Profit for the Year		756,500
Less Transfer to Reserves	(120,000)		Current Liabilities
Less Dividends			Creditors	250,000
Ordinary	(60,000)		Accounts Payable	145,500	395,500
Preference	(45,000)	(225,000)	Total Equity & Liabilities		2,827,000
Retained Earning c/d		531,500

Market Price per Share		3.75

The following comparative ratios relate to

Sean Paul’s results in the preceding two years of 2013 and 2014

Shaggy, a main competitor who is also a performer and a promoter
The average performance of the music industry:

	SHAGGY	INDUSTRY	SEAN PAUL

	2013	2014	2015

Dividend Cover	5.45 times	5.00 times
Debtors Turnover Period	20. 58 days	32.66 days
Current Ratio	2.89 : 1	2.50 : 1
Net Profit Margin	22.34%	25.50%
Creditors Turnover	1.04 times	1.55 times
Total Assets to Total Liabilities	4.58 : 1	4.01 : 1
Earnings Per Share	$0.68	$.075
Gearing Ratio	32.11%	35.50%
ROSE	26.50%	25.50%
Times Interest Earned	16.45 times	15.25 times

Question

Compute the corresponding ratios for Sean Paul for 2015

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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