ABC Inc. is a Corporation with a focus on Garment and textile manufacturing in the UAE....
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
ABC Inc. is a Corporation with a focus on Garment and textile manufacturing in the UAE. They are now looking to finance their new project, are looking for a bank to give them a loan. Find the following ratios, interpret and analyze them: a) Current Ratio b) Acid Test Ratio c) Times Interest Earned Ratio d) Debt Ratio e) Accounts Receivable Turnover ) Inventory Turnover g) Days Sales in Inventory h) Average Collection Period [8 points] Based on the ratios calculated above, Can you conclude if any bank would easily give a loan to you? Justify your answer. [2 points] Standalone statement of comprehensive income Year ended 31 December 2019 2018 AED Note AED Revenue Cost of sales Gross profit 12 13 967,215,339 (862,141.258) 105,074,081 813,481,889 (722,094232) 91.387,657 Administrative and selling expenses Other income Reversal of (provision for) impairment of trade receivables Operating profit 14 (30,1834 978,095 (27,340,230) 11,221,861 t5 4,167,783 S0,036,546 (7,716 272) 67,553,016 Finance cost Finance income Finance cost - net 18 (1,097,922) 1,146 (545,088) 3548 (541.540) 18 18 (1,096,776) Profit for the year Other comprebensive income for the year Total comprehensive income for the year 78,939,770 67,011,476 78,939.770 67.011.476 Standalone statement of financial position As at 31 December 2019 AED 2018 AED Note ASSETS Non-current asset 1,012,984 1,213,595 Property and equipment Investments in subsidiaries 4 2.2 1,343,582 2,356,566 1,213,595 Current assets Inventories Trade and other receivables Due from related parties Loan to related parties Cash and bank balances 179,413,089 121,670,892 80,115,253 26,318,739 407,517,973 409,874,539 5,529,691 193,441,503 52,580,863 33,455,659 24,349,497 309,357,213 310,570,808 6. 11 11 Total assets EQUITY AND LIABILITIES EQUITY Share capital Retained earnings Total equity 3,900,000 358,743,239 362,643,239 3,900,000 279.803,469 283.703,469 LIABILITIES Non-current liabilities Provision for employees' end of service benefits 6. 355,785 355,785 252,073 252,073 Current liabilities Trade and other payables Due to a related party Bank borrowings 10 1,123,523 26,729,064 19,022,928 46,875,515 47,231,300 409,874,539 6,079,568 20,415,438 120,260 26,615,266 26,867,339 310,570,808 17 Total liabilities Total equity and liabilities ABC Inc. is a Corporation with a focus on Garment and textile manufacturing in the UAE. They are now looking to finance their new project, are looking for a bank to give them a loan. Find the following ratios, interpret and analyze them: a) Current Ratio b) Acid Test Ratio c) Times Interest Earned Ratio d) Debt Ratio e) Accounts Receivable Turnover ) Inventory Turnover g) Days Sales in Inventory h) Average Collection Period [8 points] Based on the ratios calculated above, Can you conclude if any bank would easily give a loan to you? Justify your answer. [2 points] Standalone statement of comprehensive income Year ended 31 December 2019 2018 AED Note AED Revenue Cost of sales Gross profit 12 13 967,215,339 (862,141.258) 105,074,081 813,481,889 (722,094232) 91.387,657 Administrative and selling expenses Other income Reversal of (provision for) impairment of trade receivables Operating profit 14 (30,1834 978,095 (27,340,230) 11,221,861 t5 4,167,783 S0,036,546 (7,716 272) 67,553,016 Finance cost Finance income Finance cost - net 18 (1,097,922) 1,146 (545,088) 3548 (541.540) 18 18 (1,096,776) Profit for the year Other comprebensive income for the year Total comprehensive income for the year 78,939,770 67,011,476 78,939.770 67.011.476 Standalone statement of financial position As at 31 December 2019 AED 2018 AED Note ASSETS Non-current asset 1,012,984 1,213,595 Property and equipment Investments in subsidiaries 4 2.2 1,343,582 2,356,566 1,213,595 Current assets Inventories Trade and other receivables Due from related parties Loan to related parties Cash and bank balances 179,413,089 121,670,892 80,115,253 26,318,739 407,517,973 409,874,539 5,529,691 193,441,503 52,580,863 33,455,659 24,349,497 309,357,213 310,570,808 6. 11 11 Total assets EQUITY AND LIABILITIES EQUITY Share capital Retained earnings Total equity 3,900,000 358,743,239 362,643,239 3,900,000 279.803,469 283.703,469 LIABILITIES Non-current liabilities Provision for employees' end of service benefits 6. 355,785 355,785 252,073 252,073 Current liabilities Trade and other payables Due to a related party Bank borrowings 10 1,123,523 26,729,064 19,022,928 46,875,515 47,231,300 409,874,539 6,079,568 20,415,438 120,260 26,615,266 26,867,339 310,570,808 17 Total liabilities Total equity and liabilities
Expert Answer:
Answer rating: 100% (QA)
Step1 a To calculate Current Ratio Current Ratio is liqu... View the full answer
Related Book For
Managing the Law The Legal Aspects of Doing Business
ISBN: 978-0132164429
4th edition
Authors: Mitchell McInnes, Ian R. Kerr, J. Anthony VanDuzer
Posted Date:
Students also viewed these accounting questions
-
On the statement of comprehensive income within its 2012 annual report, Bristol-Myers Squibb included a $12 million line item behind available-for-sale securities. During 2012 the company maintained...
-
If a separate statement of comprehensive income is presented, do all elements of comprehensive income appear in this statement?
-
Following is the consolidated statement of comprehensive income for Southwest Airlines for the year ended December 31, 2014: Required 1. Which items were included in comprehensive income? If these...
-
A client of Park Street's expected a delivery of samples for an event on Friday evening. The order was setup correctly by Park Street, however the vendor that was hired to pick up and deliver the...
-
What is cybercrime, and how prevalent is it in the United States?
-
In Exercises 4556, use transformations of f(x) = 1/x or f(x) = 1/x 2 to graph each rational function. g(x) 1 x-2
-
An equation used to evaluate vacuum filtration is \[ Q=\frac{\Delta p A^{2}}{\alpha\left(\forall R w+A R_{f} ight)} \] Where \(Q \doteq L^{3} / T\) is the filtrate volume flow rate, \(\Delta p \doteq...
-
Use the table above to proofread the following items and correct them as needed. A. Please address correspondence to the following address: General Mills, PO Box 1493, Minneapolis, MI. B. The...
-
Explain the role of safety instrumented systems (SIS) in PSM, focusing on how safety integrity levels (SIL) are determined and the impact of these systems on overall process safety.
-
Reep Construction recently won a contract for the excavation and site preparation of a new rest area on the Pennsylvania Turnpike. In preparing his bid for the job, Bob Reep, founder and president of...
-
On January 15, 2020, QUEEN Company purchased 30,000 shares of GLOBAL Company at a value of $15 per share ,This investment represents 30% of GLOBAL's value. - On December 31, 2020, GLOBAL Company...
-
While forming an economic group creates trade, it can also have some drawbacks. What are the potential costs of economic integration?
-
What are some challenges for implementing strategy in emerging markets?
-
How can governments influence strategic implementation?
-
Human rights issues are more complex when operating in the international arena. Why is this so? Provide examples and discuss the objectivity of the sources.
-
What does international joint venture (IJV) control mean, and why is it important?
-
A recent poll conducted by the Society for Human Resource Management indicated that 60% of the companies surveyed conduct credit background checks for some or all job candidates. Many companies use...
-
The following table shows the rates of total return in successive years from 2004 to 2008 for the Sprott Canadian Equity Fund and for the benchmark Toronto Stock Exchange S&P/TSX Composite Index. By...
-
Peter & Harvey Furs and Local 275 had previously entered into a collective agreement that explicitly prohibited strikes and lockouts before the end of the calendar year. However, on July 30, the...
-
Is it necessary for a person to understand the nature of the obligations being undertaken in a guarantee for the guarantee to be enforceable against that person?
-
What advantage does a secured party obtain by perfecting its security interest? When should a secured party perfect?
-
Let \(A\) and \(B\) be disjoint events with \(P(A)=0.3\) and \(P(B)=0.45\). Determine the probabilities \(P(A \cup B), P(\overline{A \cup B}), P(\bar{A} \cup \bar{B})\), and \(P(\bar{A} \cap B)\).
-
Let \(P(A \cap \bar{B})=0.3\) and \(P(\bar{B})=0.6\). Determine \(P(A \cup B)\).
-
Check whether for 3 arbitrary random events \(A, B\), and \(C\) the following constellations of probabilities can be true: (1) \(P(A)=0.6, P(A \cap B)=0.2\), and \(P(A \cap \bar{B})=0.5\), (2)...
Study smarter with the SolutionInn App