PONCON Co. Ltd is a first growing business and the following accounts relate to year 2019...

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PONCON Co. Ltd is a first growing business and the following accounts relate to year 2019 and 2020: PROFIT STATEMENT FOR THE YEAR ENDED 30th JUNE 2019 Sales Less cost of goods sold Gross profit Less trading Expenses Trading profit Less debenture interest Net profit before tax Less corporation tax Net profit after tax Less ordinary share dividend Undistributed profit for the year Non-Current Assets Less depreciation 1,725,000 Current Assets Stock Debtors Cash Less current Liabilities Creditors Taxation Proposed dividend Bank overdrafts Financed by: Ordinary shares(authorised and issues) Undistributed profits 10% Debentures Required: V. Kshs 1,500,000 (300,000) 600,000 375,000 120,000 Kshs 3,000,000 217,500 240,000 187,500 1,650,000 1,350,000 675,000 BALANCE SHEET AS AT 30TH JUNE 2019 675,000 37,500 637,000 240,000 397,500 187,500 210,000 1,200,000 1,095,000 (645,000) 1,650,000 750,000 525,000 375,000 1,650,000 2020 Kshs 4,800,000 2,700,000 2,100,000 825,000 1,275,000 37,500 1,237,500 480,000 757,500 262,500 495,000 2020 Kshs 2,100,000, (375,000) 825,000 525,000 wwwww...... 1,350,000 300,000 480,000 262,500 97,500 (1,140,000) 1,935,000 750,000 1,020,000 165,000 1,935,000 (A) Using the above information, prepare the following financial rations and advice the CEO of PONCON Co. Ltd. (2 Marks) i. Return on capital employed ratio (2 Marks) ii. The Current ratio (2 Marks) iii. The Gross Profit Margin (2 Marks) iv. The gearing ratio (2 Marks) Fixed assets turnover ratio (2 Marks) vi. Debt turnover ratio (2 Marks) (ii) Comment on the current position of the enterprise with the aid of the accounting ratios calculated in (i) above. (3 Marks) PONCON Co. Ltd is a first growing business and the following accounts relate to year 2019 and 2020: PROFIT STATEMENT FOR THE YEAR ENDED 30th JUNE 2019 Sales Less cost of goods sold Gross profit Less trading Expenses Trading profit Less debenture interest Net profit before tax Less corporation tax Net profit after tax Less ordinary share dividend Undistributed profit for the year Non-Current Assets Less depreciation 1,725,000 Current Assets Stock Debtors Cash Less current Liabilities Creditors Taxation Proposed dividend Bank overdrafts Financed by: Ordinary shares(authorised and issues) Undistributed profits 10% Debentures Required: V. Kshs 1,500,000 (300,000) 600,000 375,000 120,000 Kshs 3,000,000 217,500 240,000 187,500 1,650,000 1,350,000 675,000 BALANCE SHEET AS AT 30TH JUNE 2019 675,000 37,500 637,000 240,000 397,500 187,500 210,000 1,200,000 1,095,000 (645,000) 1,650,000 750,000 525,000 375,000 1,650,000 2020 Kshs 4,800,000 2,700,000 2,100,000 825,000 1,275,000 37,500 1,237,500 480,000 757,500 262,500 495,000 2020 Kshs 2,100,000, (375,000) 825,000 525,000 wwwww...... 1,350,000 300,000 480,000 262,500 97,500 (1,140,000) 1,935,000 750,000 1,020,000 165,000 1,935,000 (A) Using the above information, prepare the following financial rations and advice the CEO of PONCON Co. Ltd. (2 Marks) i. Return on capital employed ratio (2 Marks) ii. The Current ratio (2 Marks) iii. The Gross Profit Margin (2 Marks) iv. The gearing ratio (2 Marks) Fixed assets turnover ratio (2 Marks) vi. Debt turnover ratio (2 Marks) (ii) Comment on the current position of the enterprise with the aid of the accounting ratios calculated in (i) above. (3 Marks) PONCON Co. Ltd is a first growing business and the following accounts relate to year 2019 and 2020: PROFIT STATEMENT FOR THE YEAR ENDED 30th JUNE 2019 Sales Less cost of goods sold Gross profit Less trading Expenses Trading profit Less debenture interest Net profit before tax Less corporation tax Net profit after tax Less ordinary share dividend Undistributed profit for the year Non-Current Assets Less depreciation 1,725,000 Current Assets Stock Debtors Cash Less current Liabilities Creditors Taxation Proposed dividend Bank overdrafts Financed by: Ordinary shares(authorised and issues) Undistributed profits 10% Debentures Required: V. Kshs 1,500,000 (300,000) 600,000 375,000 120,000 Kshs 3,000,000 217,500 240,000 187,500 1,650,000 1,350,000 675,000 BALANCE SHEET AS AT 30TH JUNE 2019 675,000 37,500 637,000 240,000 397,500 187,500 210,000 1,200,000 1,095,000 (645,000) 1,650,000 750,000 525,000 375,000 1,650,000 2020 Kshs 4,800,000 2,700,000 2,100,000 825,000 1,275,000 37,500 1,237,500 480,000 757,500 262,500 495,000 2020 Kshs 2,100,000, (375,000) 825,000 525,000 wwwww...... 1,350,000 300,000 480,000 262,500 97,500 (1,140,000) 1,935,000 750,000 1,020,000 165,000 1,935,000 (A) Using the above information, prepare the following financial rations and advice the CEO of PONCON Co. Ltd. (2 Marks) i. Return on capital employed ratio (2 Marks) ii. The Current ratio (2 Marks) iii. The Gross Profit Margin (2 Marks) iv. The gearing ratio (2 Marks) Fixed assets turnover ratio (2 Marks) vi. Debt turnover ratio (2 Marks) (ii) Comment on the current position of the enterprise with the aid of the accounting ratios calculated in (i) above. (3 Marks)

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