The summarised income statement for the years ended 31 March 2009 and 2010 and balance sheets as at 31 March 2009 and 31 March 2010 for Boxer plc are shown below:

Required:
(i) Calculate the following ratios for the years 2009 and 2010:
(a) gross profi t percentage of sales
(b) profi t before tax percentage of sales
(c) return on capital employed
(d) collection days
(e) payables days
(f) inventory turnover
(g) current ratio
(h) quick ratio.
(ii) Comment on Boxer plc’s financial performance over the two years and explain the importance of eff ective management of working capital (net current assets).

Transcribed Image Text:

Boxer plc Figures in 000 Revenue Cost of sales Gross profit Expenses Profit before tax Income statement for the year ended 31 March 2009 2010 5,200 5,600 (3,200) (3,400) 2,000 2,200 (1,480) (1,560) 520 640