The incomplete financial statements of Jade Ltd are presented below. Additional information: 1. The receivables turnover for
Question:
The incomplete financial statements of Jade Ltd are presented below.
Additional information:
1. The receivables turnover for the year ended 30 June 2016 is 10 times.
2. All sales are on account.
3. The profit margin for the year ended 30 June 2016 is 14.5%.
4. Return on assets is 22% (22 cents) for the year ended 30 June 2016.
5. The current ratio on 30 June 2016 is 3:1.
6. The inventory turnover for the year ended 30 June 2016 is 4.8 times
Required
Calculate the missing information, given the ratios. Show your calculations.
Sales Cost of sales Gross profit Operating expenses Interest expense Profit before income tax Income tax expense Profit JADE LTD Statement of profit or loss for the year ended 30 June 2016 $5500 000 ? ? $ 832 500 ? ? 280 000 $ ?
Step by Step Answer:
ANSWER Lets use the given ratios and other information to calculate the missing values in the financial statements of Jade Ltd Calculation of Cost of ...View the full answer
Financial Accounting Reporting Analysis And Decision Making
ISBN: 9780730313748
5th Edition
Authors: Shirley Carlon, Rosina Mladenovic Mcalpine, Chrisann Palm, Lorena Mitrione, Ngaire Kirk, Lily Wong
Related Video
Inventory turnover is a key metric that helps businesses evaluate the efficiency of their operations. A high turnover ratio is generally considered positive, indicating that the company is effectively selling its inventory and making efficient use of its resources. On the other hand, a low turnover ratio may indicate issues such as overstocking or slow sales and may require further examination to identify and address the underlying causes. Businesses use this ratio to make decisions about inventory levels, production schedules, and pricing strategies. It also helps businesses to identify areas where they may need to make improvements, such as reducing lead times for production or optimizing sales and marketing efforts. Additionally, inventory turnover is used by investors and analysts as a key performance indicator to evaluate the financial health and growth potential of a company.
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