Please calculate the below accounting ratios whilst referring to the attachment. A) Interest Coverage Ratio B) Quick Ratio C) Price of Earnings
Please calculate the below accounting ratios whilst referring to the attachment. A) Interest Coverage Ratio B) Quick Ratio C) Price of Earnings
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
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Please calculate the below accounting ratios whilst referring to the attachment.
A) Interest Coverage Ratio
B) Quick Ratio
C) Price of Earnings
![ABC Statement of financial position
2018
2019
$,000
$,000
$,000
Non-current assets: Cost less depreciation
2200
3000
Current assets
Inventory
400
450
Receivables
500
600
Cash
100
200
1000
1250
Total asset
3200
4250
Equity
Ordinary shares ($1 nominal)
1000
1500
Retained earnings
800
800
Non-current liabilities
10% loan notes
600
750
10% preference shares ($1 nominal)
200
250
Current liabilities
Payables
400
650
Taxation
200
300
600
950
Total equity and liabilities
3200
4250
Statement of profit or loss for the year
2018
2019
ended
Revenue
3000
4000
Cost of Sales
-2400
-2750
Gross Profit
600
1250
Operating Expenses
-200
-450
Profit before Interest and Tax
400
800
Interest
-60
-60
Profit before Tax
340
740
Income Tax
-180
-370
Profit after Tax
160
370
Other Information
Total Ordinary Dividend
125
200
Current market price of Ordinary Shares
1.4
1.8](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8760a89c-1786-4862-a0cc-783c20fde06e%2F8fe07c94-4f68-4aae-93b7-0227456cf722%2Fd61gig_processed.png&w=3840&q=75)
Transcribed Image Text:ABC Statement of financial position
2018
2019
$,000
$,000
$,000
Non-current assets: Cost less depreciation
2200
3000
Current assets
Inventory
400
450
Receivables
500
600
Cash
100
200
1000
1250
Total asset
3200
4250
Equity
Ordinary shares ($1 nominal)
1000
1500
Retained earnings
800
800
Non-current liabilities
10% loan notes
600
750
10% preference shares ($1 nominal)
200
250
Current liabilities
Payables
400
650
Taxation
200
300
600
950
Total equity and liabilities
3200
4250
Statement of profit or loss for the year
2018
2019
ended
Revenue
3000
4000
Cost of Sales
-2400
-2750
Gross Profit
600
1250
Operating Expenses
-200
-450
Profit before Interest and Tax
400
800
Interest
-60
-60
Profit before Tax
340
740
Income Tax
-180
-370
Profit after Tax
160
370
Other Information
Total Ordinary Dividend
125
200
Current market price of Ordinary Shares
1.4
1.8
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