Required: a. Calculate the following ratios: i. Profitability ratios - Retum on Capital Employed, Retum on Equity, Gross profit margin and Net profit margin ii. Long term solvency and stability - Debt/A sset ratio, Gearing ratio and Interest cover iii. Short-term solvency and liquidity -Current ratio and Acid test ratio iv. Efficiency (turnover ratios) - Account receivable collection period, Account payable payment period, Inventory turnover (times) b. Prepare a report addressed to the Chief Executive Officer, assessing the relative perfomance and financial position of Glory Ltd for the year ended 31* December, 2018

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Required:
a. Calculate the following ratios:
i. Profitability ratios - Retum on Capital Employed, Retum on Equity, Gross profit margin and Net
profit margin
ii. Long term solvency and stability - Debt/A sset ratio, Gearing ratio and Interest cover
iii. Short-term solvency and liquidity -Current ratio and Acid test ratio
iv. Efficiency (turnover ratios) - Account receivable collection period, Account payable payment
period, Inventory turnover (times)
b. Prepare a report addressed to the Chief Executive Officer, assessing the relative perfomance and financial
position of Glory Ltd for the year ended 31* December, 2018
Transcribed Image Text:Required: a. Calculate the following ratios: i. Profitability ratios - Retum on Capital Employed, Retum on Equity, Gross profit margin and Net profit margin ii. Long term solvency and stability - Debt/A sset ratio, Gearing ratio and Interest cover iii. Short-term solvency and liquidity -Current ratio and Acid test ratio iv. Efficiency (turnover ratios) - Account receivable collection period, Account payable payment period, Inventory turnover (times) b. Prepare a report addressed to the Chief Executive Officer, assessing the relative perfomance and financial position of Glory Ltd for the year ended 31* December, 2018
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