The following are the summarized financial statements of Ingrid Ltd and Epona Ltd, two firms that operate
Question:
The following are the summarized financial statements of Ingrid Ltd and Epona Ltd, two firms that operate in identical industries.
Required
a. Calculate three ratios for each company showing profitability and three showing liquidity.
b. Discuss three reasons why a potential investor would choose Ingrid Ltd.
c. Identify three further pieces of information necessary before making the recommendation in (b) above.
Transcribed Image Text:
Sales revenue Cost of goods sold Gross profit Overhead expenditure (including interest) Profit for the year ASSETS Non-current assets Current assets Inventories Sammarized statements of profit or loss Ingrid Ltd £¹000 Trade receivables Bank Sammarized statements of financial position Total assets EQUITY AND LIABILITIES Equity Share capital and retained earnings Non-current liabilities 8% long-term loan Current liabilities Trade payables Bank overdraft 6,000 (4,560) 1,440 (1,140) 300 Total current liabilities Total liabilities Total equity and liabilities 790 1,200 720 190 2,110 2,900 1,500 500 900 900 1,400 2,900 Epona Ltd £'000 7,200 (5,616) 1,584 (1,260) 324 1,000 1,800 1,200 3,000 4,000 2,160 1,040 800 1,840 1,840 4,000
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a Ratios Profitability ratios 1Gross profit margin Gross profit Sales revenue Ingrid Ltd 1440 6000 0...View the full answer
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Related Book For
Introduction To Financial Accounting
ISBN: 9781526803009
9th Edition
Authors: Anne Marie Ward, Andrew Thomas
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