Conday Ltd, in operation for three years, produces antique reproduction furniture for the export market. Its...
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Conday Ltd, in operation for three years, produces antique reproduction furniture for the export market. Its most recent set of accounts is set out below. Current assets Debtors Inventory Non-current assets Freehold land and buildings at cost Plant and machinery at cost Less accumulated depreciation Total assets Current liabilities Bank overdraft Conday Ltd Balance Sheet as at 31 December 2016 Creditors Taxation Non-current liabilities Bank loan Shareholders' equity Paid-up capital (issued at $1 each) Retained profits Total liabilities and shareholders' equity $'000 820 600 942 (180) 385 665 95 700 365 $'000 1,420 228 762 990 2.410 1,145 200 1,065 2.410 Conday Ltd Income statement for the year ended 31 December 2016 Sales Cost of sales: Opening inventory Purchases Closing inventory Gross profit Less other expenses Net profit Income tax Net profit after tax Proposed dividends Increase in retained profit Additional information: 550 1670 (600) $'000 2,600 a) Return on total assets b) Net profit margin c) Average settlement period for debtors d) Average settlement period for creditors e) Average inventory turnover period f) Current ratio g) Quick ratio h) Gearing ratio 1) Dividend payout ratio j) Earnings per share 1.620 980 (660) 320 (95) 225 (160) Interest expense for the financial period is $24,000. The opening balance of total assets for the year was $2,410,000. All sales and purchases are in credit terms. The return on total assets for previous year is 12%. Net profit margin for the previous year is 10%. The opening balance of debtors for the year is $750,000. The opening balance of creditors for the year is $660,000. The average value of earnings per share (EPS) in the industry is $0.40/share. Based on the information given above, calculate the following financial ratios for year 2016 and interpret the healthiness of the business: Conday Ltd, in operation for three years, produces antique reproduction furniture for the export market. Its most recent set of accounts is set out below. Current assets Debtors Inventory Non-current assets Freehold land and buildings at cost Plant and machinery at cost Less accumulated depreciation Total assets Current liabilities Bank overdraft Conday Ltd Balance Sheet as at 31 December 2016 Creditors Taxation Non-current liabilities Bank loan Shareholders' equity Paid-up capital (issued at $1 each) Retained profits Total liabilities and shareholders' equity $'000 820 600 942 (180) 385 665 95 700 365 $'000 1,420 228 762 990 2.410 1,145 200 1,065 2.410 Conday Ltd Income statement for the year ended 31 December 2016 Sales Cost of sales: Opening inventory Purchases Closing inventory Gross profit Less other expenses Net profit Income tax Net profit after tax Proposed dividends Increase in retained profit Additional information: 550 1670 (600) $'000 2,600 a) Return on total assets b) Net profit margin c) Average settlement period for debtors d) Average settlement period for creditors e) Average inventory turnover period f) Current ratio g) Quick ratio h) Gearing ratio 1) Dividend payout ratio j) Earnings per share 1.620 980 (660) 320 (95) 225 (160) Interest expense for the financial period is $24,000. The opening balance of total assets for the year was $2,410,000. All sales and purchases are in credit terms. The return on total assets for previous year is 12%. Net profit margin for the previous year is 10%. The opening balance of debtors for the year is $750,000. The opening balance of creditors for the year is $660,000. The average value of earnings per share (EPS) in the industry is $0.40/share. Based on the information given above, calculate the following financial ratios for year 2016 and interpret the healthiness of the business:
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Answer rating: 100% (QA)
To calculate the financial ratios for Conday Ltd for the year 2016 we can use the information provided a Return on Total Assets Return on Total Assets Net Profit Average Total Assets 100 Net Profit 22... View the full answer
Related Book For
Accounting and Finance An Introduction
ISBN: 978-1292088297
8th edition
Authors: Peter Atrill, Eddie McLaney
Posted Date:
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