Salmon Ltd and Tuna Ltd are both retailers of ready-made garments. Salmon aims at the more expensive
Question:
Salmon Ltd and Tuna Ltd are both retailers of ready-made garments. Salmon aims at the more expensive end of the market, Tuna at the cheaper end. The financial statements of both companies are shown below:
Required:
Comment on the comparative profitability of both companies, on the basis of calculating four relevant accounting ratios.
Transcribed Image Text:
Statement of income year ended 31.12.2011 Salmon £'000 Sales revenue Cost of sales Gross profit Distribution cost Administrative expenses Operating profit Interest Profit before tax Taxation Profit after tax 852 (184) (429) 2,840 18,460 (1,988) (16,712) 239 (40) 199 (39) Tuna 160 £'000 1,748 (216) (426) 1,106 1,106 (220) 886
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Comments 1 Catering to customers at the upper end of the market Salmon Ltd is able to fix its sale p...View the full answer
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Related Book For
Financial Accounting An Introduction
ISBN: 9780273737650
2nd Edition
Authors: Mr Barry Elliott, Mr Augustine Benedict
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