Please, help me only with question b)Ratio calculations are:Net profit Margin = net profit/sales = (210)/5600 = - 3.75%Gross profit margin = gross profit/sales = 770/5600 = 13.75%Current ratio= current assets/current liability= 15,840/5,150= 3.08Acid test ratio = (cash+ accounts receivable) / current liability = (7,340+8030+150)/5,150 = 3.02Accounts receivable collection period = Receivables / Average daily credit sales = 150/ (5600/360 days) = 9.64 days or 10 daysAccounts payable payment period = Accounts Payable / Average daily purchases = (5,150/ (5,150/360 days) = 360 daysFinancial statements from part A are: PART Ba) According to the information available in Income and Financial position statements in Part A, calculatethe following ratios for Anne's business for October 2021Competitors AverageCurrent Acid testNet profitmarginAccounts receivable Accountscollection periodGrossprofitmarginratioratiopayable16 Days28 Daysрaymentperiod27 Days12DaysYear 20190.320.552.71.34Year 20200.280.562.61.32Year 20210.020.082.81.3826 Days17 Daysb. Assuming Anne's competitor's ratio averages are as stated above for month October of years 2019,2020 and 2021: Analyse her performance with reference to the ratios of October 2021 calculated incomparison to those of her competitor. Also, briefly explain the impact of Covid -19 outbreak on theaverage ratios (Maximum of 500 words).

b) The financial ratios provide the data to compare the performance with other players or the past…

Answered: PART B a) According to the information…

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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Please, help me only with question b)

Ratio calculations are:

Net profit Margin = net profit/sales = (210)/5600 = - 3.75%
Gross profit margin = gross profit/sales = 770/5600 = 13.75%
Current ratio= current assets/current liability= 15,840/5,150= 3.08
Acid test ratio = (cash+ accounts receivable) / current liability = (7,340+8030+150)/5,150 = 3.02
Accounts receivable collection period = Receivables / Average daily credit sales = 150/ (5600/360 days) = 9.64 days or 10 days
Accounts payable payment period = Accounts Payable / Average daily purchases = (5,150/ (5,150/360 days) = 360 days

Financial statements from part A are:

PART B
a) According to the information available in Income and Financial position statements in Part A, calculate
the following ratios for Anne's business for October 2021
Competitors Average
Current Acid test
Net profit
margin
Accounts receivable Accounts
collection period
Gross
profit
margin
ratio
ratio
payable
16 Days
28 Days
рayment
period
27 Days
12Days
Year 2019
0.32
0.55
2.7
1.34
Year 2020
0.28
0.56
2.6
1.32
Year 2021
0.02
0.08
2.8
1.38
26 Days
17 Days
b. Assuming Anne's competitor's ratio averages are as stated above for month October of years 2019,
2020 and 2021: Analyse her performance with reference to the ratios of October 2021 calculated in
comparison to those of her competitor. Also, briefly explain the impact of Covid -19 outbreak on the
average ratios (Maximum of 500 words).

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