The following information has been extracted from the financial statements and notes of CASAN Ltd. 2019 2018 Cash and Cash Equivalents 59,100 47,700 Account Receivable(net) 137,800 129,800 Account Payable 45,750 39,950 Revenue 610,000 625,000 Cost of Goods Sold 559,500 568,500 Profit 50,500 56,500 Inventory 223,700 189,300 Total assets 540,000 555,000 Current Liabilities 250,900 265,700 Total liabilities 300,000 330,000 Short-term investments 75,400 85,900 Based on the above information calculate the following ratios: 1) Return on assets for 2019. 2) Profit Margin ratio for 2019. 3) Debt to assets ratio for 2019. 4) Acid-test ratio for 2018. 5) Inventory Turnover ratio for 2019.
Reporting Cash Flows
Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows from various activities such as operating, financing, and investment. Reporting this statement is important because it is the main financial statement of the company.
Balance Sheet
A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the most critical measures of the financial performance and position of the company, and as the name suggests, the statement must balance the assets against the liabilities and equity. The assets are what the company owns, and the liabilities represent what the company owes. Equity represents the amount invested in the business, either by the promoters of the company or by external shareholders. The total assets must match total liabilities plus equity.
Financial Statements
Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It includes three main components that are balance sheet, income statement and cash flow statement.
Owner's Capital
Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expected to have either a debit balance or a credit balance, depending on the nature of the account. An asset account will have a debit balance as normal balance because an asset is a debit account. Similarly, a liability account will have the normal balance as a credit balance because it is amount owed, representing a credit account. Equity is also said to have a credit balance as its normal balance. However, sometimes the normal balances may be reversed, often due to incorrect journal or posting entries or other accounting/ clerical errors.
The following information has been extracted from the financial statements and notes of CASAN Ltd.
|
|
2019 |
2018 |
|
Cash and Cash Equivalents |
59,100 |
47,700 |
|
|
137,800 |
129,800 |
|
Account Payable |
45,750 |
39,950 |
|
Revenue |
610,000 |
625,000 |
|
Cost of Goods Sold |
559,500 |
568,500 |
|
Profit |
50,500 |
56,500 |
|
Inventory |
223,700 |
189,300 |
|
Total assets |
540,000 |
555,000 |
|
Current Liabilities |
250,900 |
265,700 |
|
Total liabilities |
300,000 |
330,000 |
|
Short-term investments |
75,400 |
85,900 |
Based on the above information calculate the following ratios:
1) Return on assets for 2019.
2) Profit Margin ratio for 2019.
3) Debt to assets ratio for 2019.
4) Acid-test ratio for 2018.
5) Inventory Turnover ratio for 2019.
The following calculations are done in the records of CASAN Ltd.
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