Compute the following ratiosat December 31, 2019:i.Current ratioii.Acid-test Ratioiii.Account Receivables Turnoveriv.Average collection periodv.Inventory Turnovervi.Days in inventoryvii.Profit marginviii.Debts to Asset ratioix.Return on Assetsx.Times Interest Earned BALANCE SHEETFor The Year Ended 31* December, 2019ParticularNote No.Amount ($)(I)ASSETS(1) Non-Current Assets(a) Fixed AssetsTangible AssetsLand65,000BuildingEquipmentDelivery Truck(b) Non- Current investment(c) Other Current Assets95,00040,00042,000(2) Current AssetsCurrent InvestmentsInventories21,5001,700Merchandise InventorySuppliesTrade receivableAccounts Receivable51,000Cash & Cash EquivalentsCashMarketable securitiesOther Current AssetsUnearned Rent Revenue2,000Total320,060(I) EQUITY AND LIABILITIES(1)Shareholders FundA Share CapitalB Reserve and Surplus(2)Non-Current Liabilities(a) Long term borrowingsNotes Payable(b) Long-term provisionsAccumulated Depreciation- Buildings54,40097,99030,000Accumulated Depreciation- New Delivery TruckAccumulated Depreciation- Equipment33,00016,80018,000(3) Current LiabilitiesShort- term borrowingsTrade payablesAccounts payable19,3006,000Notes payableShort Term ProvisionProvision for Doubtful Debts11,270Other Current LiabilitiesBank Overdraft11,70018,0003,600320,060Salaries & wages payableInterest PayableTotal

Ratio analysis: This is the quantitative analysis of financial statements of a business enterprise.…

Compute the following ratiosat December 31, 2019: i.Current ratio ii.Acid-test Ratio iii.Account Receivables Turnover iv.Average collection period v.Inventory Turnover vi.Days in inventory vii.Profit margin viii.Debts to Asset ratio ix.Return on Assets x.Times Interest Earned

Compute the following ratiosat December 31, 2019: i.Current ratio ii.Acid-test Ratio iii.Account Receivables Turnover iv.Average collection period v.Inventory Turnover vi.Days in inventory vii.Profit margin viii.Debts to Asset ratio ix.Return on Assets x.Times Interest Earned

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

Compute the following ratiosat December 31, 2019:

i.Current ratio

ii.Acid-test Ratio

iii.Account Receivables Turnover

iv.Average collection period

v.Inventory Turnover

vi.Days in inventory

vii.Profit margin

viii.Debts to Asset ratio

ix.Return on Assets

x.Times Interest Earned

BALANCE SHEET
For The Year Ended 31* December, 2019
Particular
Note No.
Amount ($)
(I)ASSETS
(1) Non-Current Assets
(a) Fixed Assets
Tangible Assets
Land
65,000
Building
Equipment
Delivery Truck
(b) Non- Current investment
(c) Other Current Assets
95,000
40,000
42,000
(2) Current Assets
Current Investments
Inventories
21,500
1,700
Merchandise Inventory
Supplies
Trade receivable
Accounts Receivable
51,000
Cash & Cash Equivalents
Cash
Marketable securities
Other Current Assets
Unearned Rent Revenue
2,000
Total
320,060
(I) EQUITY AND LIABILITIES
(1)Shareholders Fund
A Share Capital
B Reserve and Surplus
(2)Non-Current Liabilities
(a) Long term borrowings
Notes Payable
(b) Long-term provisions
Accumulated Depreciation- Buildings
54,400
97,990
30,000
Accumulated Depreciation- New Delivery Truck
Accumulated Depreciation- Equipment
33,000
16,800
18,000
(3) Current Liabilities
Short- term borrowings
Trade payables
Accounts payable
19,300
6,000
Notes payable
Short Term Provision
Provision for Doubtful Debts
11,270
Other Current Liabilities
Bank Overdraft
11,700
18,000
3,600
320,060
Salaries & wages payable
Interest Payable
Total

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