REQUIRED:: Calculate the following Ratios: a) Gross Profit Margin b) Net Profit Margin c) Current Ratio
REQUIRED:: Calculate the following Ratios: a) Gross Profit Margin b) Net Profit Margin c) Current Ratio
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
REQUIRED::
Calculate the following Ratios:
-
a) Gross Profit Margin
-
b) Net Profit Margin
-
c)
Current Ratio -
d) Quick Acid Ratio
-
e) Inventory Turnover Ratio (Days)
-
f)
Accounts Receivable Turnover Ratio -
g) Accounts Payable Turnover Ratio
-
h) Debt ratio
-
i) Return on Assets
b) Explain the limitation of ratio in a business
![These will be elaborated in the following sections. To illustrate better the computations of
financial ratios and its interpretation, the financial statements if ABC Bhd is provide in
TABLE 1.1.
INCOME STATEMENT FOR THE YEAR ENDED 31ST DECEMBER 2020
TABLE 1.1
RM('000)
RM('000)
Revenue
Cost of sales and direct expenses
Gross profit
Other operating income
Distribution expenses
Administrative expenses
Other operating expenses
Profit from operations
Finance cost
3,394
(2.485)
909
(300)
(240)
(105)
(645)
264
(71)
Investing Income
Fair value gain of equity
investments
Profit before tax
Тах expense
Profit after tax for year
Retained profits brought forward
Available for appropriation
Dividends paid
Retained profits carried forward
40
5
238
(70)
168
220
388
(45)
343](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa7f72566-cea0-4d03-af37-69cebd6988b2%2Fc5a1d6cc-6fd9-4525-a416-b7afc9e4c764%2Fvkriv49_processed.jpeg&w=3840&q=75)
Transcribed Image Text:These will be elaborated in the following sections. To illustrate better the computations of
financial ratios and its interpretation, the financial statements if ABC Bhd is provide in
TABLE 1.1.
INCOME STATEMENT FOR THE YEAR ENDED 31ST DECEMBER 2020
TABLE 1.1
RM('000)
RM('000)
Revenue
Cost of sales and direct expenses
Gross profit
Other operating income
Distribution expenses
Administrative expenses
Other operating expenses
Profit from operations
Finance cost
3,394
(2.485)
909
(300)
(240)
(105)
(645)
264
(71)
Investing Income
Fair value gain of equity
investments
Profit before tax
Тах expense
Profit after tax for year
Retained profits brought forward
Available for appropriation
Dividends paid
Retained profits carried forward
40
5
238
(70)
168
220
388
(45)
343
![FINANCIAL POSITION AS AT 31' DECEMBER 2020
RM('000)
RM('000)
Non- Curent Assets
Property, plant and equipment
Investment property
Investment in equity instruments
Investment in debt instruments
2,140
1.590
350
250
4.330
Current assets
Inventories
Trade receivables
Other receivables
Deposits and prepayments
Cash at bank and in hand
440
443
90
40
188
1.201
5.531
Total Assets
Equity
Share capital
Share premium
Retained profits
Total equity
600
50
343
993
Non-current liabilities
Bank borrowings
Financial liabilities
Deferred tax liabilities
Total non-current liabilities
2,565
879
179
3.623
Current liabilities
Trade payables
325
Асспals
and
other
115
payables
Bank borrowings
Current tax liabilities
Total Current liabilities
Total liabilities
Total Equity and Liabilities
355
120
915
4,538
5,531](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa7f72566-cea0-4d03-af37-69cebd6988b2%2Fc5a1d6cc-6fd9-4525-a416-b7afc9e4c764%2Fmfnvykj_processed.jpeg&w=3840&q=75)
Transcribed Image Text:FINANCIAL POSITION AS AT 31' DECEMBER 2020
RM('000)
RM('000)
Non- Curent Assets
Property, plant and equipment
Investment property
Investment in equity instruments
Investment in debt instruments
2,140
1.590
350
250
4.330
Current assets
Inventories
Trade receivables
Other receivables
Deposits and prepayments
Cash at bank and in hand
440
443
90
40
188
1.201
5.531
Total Assets
Equity
Share capital
Share premium
Retained profits
Total equity
600
50
343
993
Non-current liabilities
Bank borrowings
Financial liabilities
Deferred tax liabilities
Total non-current liabilities
2,565
879
179
3.623
Current liabilities
Trade payables
325
Асспals
and
other
115
payables
Bank borrowings
Current tax liabilities
Total Current liabilities
Total liabilities
Total Equity and Liabilities
355
120
915
4,538
5,531
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