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wholesale stores as at June 2020: Statement of financial position as at 30 June 2020 Zalip Limited – Shs "Million Avela Limited – Shs "Million' Non - Current assets: Land and buildings Fixtures and fittings 360 87 510 91.2 601.2 447 Current assets: Inventories Trade receivables Cash bank 592 1764 84.6 403 321.9 91.6 816.5 1,417.7 853 Total Assets |Equity and Liabilities: Ordinary shares (sh 1 each) | 320 Retained earnings Total equity Non- current Liabilities: Borrowings – Loan notes Current Liabilities: Trade payables |Taxation 1,300 250 624.6 874.6 367.6 687.6 190 250 406.4 16 422.4 275.7 17.4 293.1 Total equity and liabilities | Income statement for the year ended 30 June 2020 Revenue Cost of sales Gross profit Operating expenses Operating profit Interest payable Profit before taxation Тахation Profit for the yvear Zalip Limited– Shs "Million | 1,478. 1 |(1,018.3) 459.8 (308.5) 151.30 (19.4) 131.90 (32.0) | 99.90 Avela Limited – Shs "Million" 1,790 4 (1,214.9) 575.5 |(408.6). 166.90 |(27,5) 139.40 |(34.80) | 104.60 Additional information 1. All purchases and sales were on credit 2. Zalip limited and Avela limited has announced their intention to pay dividend of sh. 135 million and shs 95 million respectively in respect of the year 2020. 3. The market value of a share in Zalip limited and Avela limited at the end of the year were shs 6.50 and sh 8.20 respectively Required For each business, calculate two ratios that are concerned with each of the following aspects: i) Profitability ii) Efficiency i) Liquidity iv) Gearing b) Interpret the ratios above

wholesale stores as at June 2020: Statement of financial position as at 30 June 2020 Zalip Limited – Shs "Million Avela Limited – Shs "Million' Non - Current assets: Land and buildings Fixtures and fittings 360 87 510 91.2 601.2 447 Current assets: Inventories Trade receivables Cash bank 592 1764 84.6 403 321.9 91.6 816.5 1,417.7 853 Total Assets |Equity and Liabilities: Ordinary shares (sh 1 each) | 320 Retained earnings Total equity Non- current Liabilities: Borrowings – Loan notes Current Liabilities: Trade payables |Taxation 1,300 250 624.6 874.6 367.6 687.6 190 250 406.4 16 422.4 275.7 17.4 293.1 Total equity and liabilities | Income statement for the year ended 30 June 2020 Revenue Cost of sales Gross profit Operating expenses Operating profit Interest payable Profit before taxation Тахation Profit for the yvear Zalip Limited– Shs "Million | 1,478. 1 |(1,018.3) 459.8 (308.5) 151.30 (19.4) 131.90 (32.0) | 99.90 Avela Limited – Shs "Million" 1,790 4 (1,214.9) 575.5 |(408.6). 166.90 |(27,5) 139.40 |(34.80) | 104.60 Additional information 1. All purchases and sales were on credit 2. Zalip limited and Avela limited has announced their intention to pay dividend of sh. 135 million and shs 95 million respectively in respect of the year 2020. 3. The market value of a share in Zalip limited and Avela limited at the end of the year were shs 6.50 and sh 8.20 respectively Required For each business, calculate two ratios that are concerned with each of the following aspects: i) Profitability ii) Efficiency i) Liquidity iv) Gearing b) Interpret the ratios above

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The following information relates to Zalip limited and Avela limited which operates wholesale stores as at June 2020: Statement of financial position as at 30 June 2020 Zalip Limited – Shs "Million Avela Limited - Shs "Million" Non - Current assets: Land and buildings Fixtures and fittings 510 91.2 601.2 360 87 447 Current assets: Inventories Trade receivables Cash bank 592 176.4 84.6 853 1,300 403 | 321.9 91.6 816.5 1,417.7 Total Assets Equity and Liabilities: Ordinary shares (sh 1 each) Retained earnings Total equity Non- current Liabilities: Borrowings - Loan notes Current Liabilities: | Trade payables Taxation 320 367.6 687.6 250 624.6 874.6 190 250 406.4 275.7 16 17.4 422.4 293.1 Total equity and liabilities Income statement for the year ended 30 June 2020 Avela Limited – Shs "Million Zalip Limited – Shs "Million 1,478.1 (1.018.3) Revenue |Cost of sales Gross profit Operating expenses Operating profit Interest pavable Profit before taxation Taxation Profit for the year 1,790.4 (1.214.9) 575.5 459.8 (308.5) 151.30 |(19.4) | 131.90 (32.0) (408.6) 166.90 (27.5) |139.40 (34.80) 104.60 99.90 Additional information 1. All purchases and sales were on credit 2. Zalip limited and Avela limited has announced their intention to pay dividend of sh. 135 million and shs 95 million respectively in respect of the year 2Ő2Ó. 3. The market value of a share in Zalip limited and Avela limited at the end of the year were shs 6.50 and sh 8.20 respectively Required For each business, calculate two ratios that are concerned with each of the following aspects: i) Profitability ii) Efficiency i11) Liquidity iv) Gearing b) Interpret the ratios above
Transcribed Image Text:The following information relates to Zalip limited and Avela limited which operates wholesale stores as at June 2020: Statement of financial position as at 30 June 2020 Zalip Limited – Shs "Million Avela Limited - Shs "Million" Non - Current assets: Land and buildings Fixtures and fittings 510 91.2 601.2 360 87 447 Current assets: Inventories Trade receivables Cash bank 592 176.4 84.6 853 1,300 403 | 321.9 91.6 816.5 1,417.7 Total Assets Equity and Liabilities: Ordinary shares (sh 1 each) Retained earnings Total equity Non- current Liabilities: Borrowings - Loan notes Current Liabilities: | Trade payables Taxation 320 367.6 687.6 250 624.6 874.6 190 250 406.4 275.7 16 17.4 422.4 293.1 Total equity and liabilities Income statement for the year ended 30 June 2020 Avela Limited – Shs "Million Zalip Limited – Shs "Million 1,478.1 (1.018.3) Revenue |Cost of sales Gross profit Operating expenses Operating profit Interest pavable Profit before taxation Taxation Profit for the year 1,790.4 (1.214.9) 575.5 459.8 (308.5) 151.30 |(19.4) | 131.90 (32.0) (408.6) 166.90 (27.5) |139.40 (34.80) 104.60 99.90 Additional information 1. All purchases and sales were on credit 2. Zalip limited and Avela limited has announced their intention to pay dividend of sh. 135 million and shs 95 million respectively in respect of the year 2Ő2Ó. 3. The market value of a share in Zalip limited and Avela limited at the end of the year were shs 6.50 and sh 8.20 respectively Required For each business, calculate two ratios that are concerned with each of the following aspects: i) Profitability ii) Efficiency i11) Liquidity iv) Gearing b) Interpret the ratios above
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