Question 2 Marsh Company has provided you with the financial statements for the last two years. Marsh Company Income Statement for the year ends Revenue Cost of Sales Gross Profit Expenses Operating Profit Interest Payable Profit Before Tax Tax Profit After Tax Marsh Company Statement of Financial Position Non-Current assets Current assets: Inventory Receivables Cash Payables Net current assets Long term loan Capital Retained earnings 2019 £ 000 440 (248) 192 (122) 70 (10) 60 (11) 49 2019 £000 405 45 65 7 117 72 45 450 100 350 250 100 850 2020 £ 000 330 (192) 138 (88) 50 (10) 40 (7) 33 2020 £000 361 28 46 10 84 32 52 413 100 313 250 63 313
Hi there, from that income statement I am stuck on the following calculations:
your help would be greatly appreciated
thank you
2019 2020
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Asset Turnover: Sales revenue \ total assets (current assets + fixed assets) |
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Non-current asset turnover: Sales \ non-current assets (FA)
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440\405=1.09 |
330\361=0.91 |
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Current ratio: Current assets\ current liabilities |
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Quick ratio: (current asset- inventories) \ current liabilities |
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Inventory days: Average inventory\cost of sales x 365 |
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Receivable days: Average receivables\credit sales x 365
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Payable days: Average payables\credit purchases x 365 |
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Interest cover: Operating profit\interest payable |
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