The following financial statements were extracted from the books of Alpha Ltd. and Omega Ltd. for the year ended 31 March 2023: Statement of profit or loss for the year ended 31 March 2023: Alpha Ltd. Omega Ltd. Sh.“million” Sh.“million” Revenue 1,699.815 2,058.96 Cost of sales (1,171.045) (1,397.135) Gross profit 528.77 661.825 Less: Operating expenses (354.775) (469.89) Net profit 173.995 191.935 Less: Finance expenses (22.31) (31.625) Profit before tax 151.685 160.31 Tax (36.8) (40.02) Profit for the year 114.885 120.29 Statement of financial position as at 31 March 2023: Alpha Ltd. Omega Ltd. Non-current assets Sh.“million” Sh.“million” Land and building 414.00 586.5 Furniture and fittings 100.65 104.88 514.05 691.38 Current assets: Inventories 680.80 463.45 Trade receivables 202.86 370.185 Bank 97.29 105.34 980.95 938.975 Total assets 1,495 1,630.355 Capital and liabilities: Capital: Ordinary share capital 368.00 287.50 Retained earning 422.74 718.29 790.74 1,005.79 Non-current liabilities: Bank loan 218.50 287.50 Current liabilities: Trade payable 467.36 317.055 Tax 18.40 20.010 485.76 337.065 Total capital and liabilities 1,495 1,630.355 The following additional information is available: 1. All purchases and sales were on credit. 2. Alpha Ltd. and Omega Ltd. had announced their intention to pay dividend Sh.155.25 million and Sh.109.25 million respectively for the year ended 31 March 2023. 3. The market value per share in Alpha Ltd. and Omega Ltd. at the end of the year were Sh.7.50 and Sh.9.40 respectively. Required: For each company, calculate two ratios that are concerned with each of the following aspects: (i) Profitability. (ii) Liquidity. (iii) Gearing. (iv) Efficiency.
The following financial statements were extracted from the books of Alpha Ltd. and Omega Ltd. for the year
ended 31 March 2023:
Statement of profit or loss for the year ended 31 March 2023:
Alpha Ltd. Omega Ltd.
Sh.“million” Sh.“million”
Revenue 1,699.815 2,058.96
Cost of sales (1,171.045) (1,397.135)
Gross profit 528.77 661.825
Less: Operating expenses (354.775) (469.89)
Net profit 173.995 191.935
Less: Finance expenses (22.31) (31.625)
Profit before tax 151.685 160.31
Tax (36.8) (40.02)
Profit for the year 114.885 120.29
Statement of financial position as at 31 March 2023:
Alpha Ltd. Omega Ltd.
Non-current assets Sh.“million” Sh.“million”
Land and building 414.00 586.5
Furniture and fittings 100.65 104.88
514.05 691.38
Current assets:
Inventories 680.80 463.45
Trade receivables 202.86 370.185
Bank 97.29 105.34
980.95 938.975
Total assets 1,495 1,630.355
Capital and liabilities:
Capital:
Ordinary share capital 368.00 287.50
Retained earning 422.74 718.29
790.74 1,005.79
Non-current liabilities:
Bank loan 218.50 287.50
Current liabilities:
Trade payable 467.36 317.055
Tax 18.40 20.010
485.76 337.065
Total capital and liabilities 1,495 1,630.355
The following additional information is available:
1. All purchases and sales were on credit.
2. Alpha Ltd. and Omega Ltd. had announced their intention to pay dividend Sh.155.25 million and
Sh.109.25 million respectively for the year ended 31 March 2023.
3. The market value per share in Alpha Ltd. and Omega Ltd. at the end of the year were Sh.7.50 and Sh.9.40
respectively.
Required:
For each company, calculate two ratios that are concerned with each of the following aspects:
(i) Profitability.
(ii) Liquidity.
(iii) Gearing.
(iv) Efficiency.
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