Maria owns and runs her own online premium clothing business (sole trader) named Maria's Clothing Solutions...
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Maria owns and runs her own online premium clothing business (sole trader) named "Maria's Clothing Solutions (MS). Her main competitor is "Brenda's Extraordinary Clothing (BC). She is interested in the performance of her business in comparison with 'Brenda's Extraordinary Clothing for the financial year ended 30 June 2019. She obtains the financial statements for both retailers and performs a ratio analysis. Selected ratios are summarised below: Ratio Name Quick ratio Receivables average collection period Profit margin Debt to assets ratio Maria's Clothing Solutions (MS) 28:1 (1) (i) (iv) 19 days 31% 23% Required: Using the table provided over the page, identify: Brenda's Extraordinary Clothing (BC) 1.3:1 13 days The ratio formula (2 marks) The category the ratio falls under (2 marks) What the ratio indicates (6 marks) Comment on which business has a better result and why (8 marks) 51% Maria owns and runs her own online premium clothing business (sole trader) named "Maria's Clothing Solutions (MS). Her main competitor is "Brenda's Extraordinary Clothing (BC). She is interested in the performance of her business in comparison with 'Brenda's Extraordinary Clothing for the financial year ended 30 June 2019. She obtains the financial statements for both retailers and performs a ratio analysis. Selected ratios are summarised below: Ratio Name Quick ratio Receivables average collection period Profit margin Debt to assets ratio Maria's Clothing Solutions (MS) 28:1 (1) (i) (iv) 19 days 31% 23% Required: Using the table provided over the page, identify: Brenda's Extraordinary Clothing (BC) 1.3:1 13 days The ratio formula (2 marks) The category the ratio falls under (2 marks) What the ratio indicates (6 marks) Comment on which business has a better result and why (8 marks) 51%
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Answer rating: 100% (QA)
Analysis 1 Quick Ratio Formula Current AssetsInventory Current Liabilities Category Liquidity Ratio Indication The quick ratio which measures the abil... View the full answer
Related Book For
Fundamental Managerial Accounting Concepts
ISBN: 978-1259569197
8th edition
Authors: Thomas Edmonds, Christopher Edmonds, Bor Yi Tsay, Philip Olds
Posted Date:
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