Statement of Financial Position as at 31 December 2018 Assets 2018 2017 GHS GHS Non-current assets Property, plant and equipment 802,180 656,071 Current assets 64,422 905,679 Inventory 86,550 Trade receivables 807,712 Prepayment and accrued income Cash at bank and in hand 97,022 45,729 1,327 1,068,450 1,008,354 68,363 Total assets 1,870,630 1,664,425_ Equity and liabilities Equity Ordinary shares 258,178 258,178 651,721 909,899 410,591 668,769 Income surplus Non-current liabilities 10% loan stock 100,000 100,000 Current liabilities 627,018 81,279 545,340 280,464 Trade payables Accruals and deferred income Corporate taxes Other taxes 108,000 37,200 44,434 860,731 1,870,630 1,664,425 32,652 895,656 Total equity and liabilities Required: a. Calculate the following ratios: i. Profitability ratios - Return on Capital Employed, Return on Equity, Gross profit margin and Net profit margin ii. Long term solvency and stability - DebtU/Asset 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 performance and financial position of Glory Ltd for the year ended 31" December, 2018
Statement of Financial Position as at 31 December 2018 Assets 2018 2017 GHS GHS Non-current assets Property, plant and equipment 802,180 656,071 Current assets 64,422 905,679 Inventory 86,550 Trade receivables 807,712 Prepayment and accrued income Cash at bank and in hand 97,022 45,729 1,327 1,068,450 1,008,354 68,363 Total assets 1,870,630 1,664,425_ Equity and liabilities Equity Ordinary shares 258,178 258,178 651,721 909,899 410,591 668,769 Income surplus Non-current liabilities 10% loan stock 100,000 100,000 Current liabilities 627,018 81,279 545,340 280,464 Trade payables Accruals and deferred income Corporate taxes Other taxes 108,000 37,200 44,434 860,731 1,870,630 1,664,425 32,652 895,656 Total equity and liabilities Required: a. Calculate the following ratios: i. Profitability ratios - Return on Capital Employed, Return on Equity, Gross profit margin and Net profit margin ii. Long term solvency and stability - DebtU/Asset 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 performance and financial position of Glory Ltd for the year ended 31" December, 2018
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
You are a consultant for Glory Ltd, a quoted company operating in the manufacturing sector. Following are a Statement of Profit or Loss and
Transcribed Image Text:Statement of Financial Position as at 31 December 2018
Assets
2018
2017
GHS
GHS
Non-current assets
Property, plant and equipment
802,180
656,071
Current assets
64,422
905,679
Inventory
86,550
Trade receivables
807,712
Prepayment and accrued income
Cash at bank and in hand
97,022
45,729
1,327
1,068,450 1,008,354
68,363
Total assets
1,870,630 1,664,425_
Equity and liabilities
Equity
Ordinary shares
258,178
258,178
651,721
909,899
410,591
668,769
Income surplus
Non-current liabilities
10% loan stock
100,000
100,000
Current liabilities
627,018
81,279
545,340
280,464
Trade payables
Accruals and deferred income
Corporate taxes
Other taxes
108,000
37,200
44,434
860,731
1,870,630 1,664,425
32,652
895,656
Total equity and liabilities
Required:
a. Calculate the following ratios:
i. Profitability ratios - Return on Capital Employed, Return on Equity, Gross profit margin and Net
profit margin
ii. Long term solvency and stability - DebtU/Asset 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 performance and financial
position of Glory Ltd for the year ended 31" December, 2018
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