Current assets Trading inventories Trade receivables Cash and cash equivalents Total assets Owner's equity and liabilities...

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Current assets Trading inventories Trade receivables Cash and cash equivalents Total assets Owner's equity and liabilities Owner's equity Capital Plus Net profit Less Drawings Non current liabilities Mortgage loan: Nesko Mortgage Current liabilities Trade creditors Amdex credit card Total equity and liabilities Comparative figures: Ratio Return on average owner's equity Current ratio Average trade debtors collection period Industry averages The return on average owner's equity for the industry is 60 % The current ratio for the industry is 2:1 The average trade debtors collection period for the industry is 24 days 1.1 Return on average owner's equity 1.2 Current ratio 1.3 Average trade debtor's collection period 58.00% 3:1 48 139 80 30 634.42 21 006.46 8 1 089 570.06 288 978.86 (39 387.11) 56 892.50 20 131.19 15 754.84 2015 51.00% 1.5:1 1 332 159.66 Ratio for the years ended 30 November 9 99 780.68 1 431 940.35 1 339 161.82 56 892.50 35 886.04 1 431 940.35 2014 REQUIRED: Calculate the following ratios for the year ended 30 November 2016 and comment on the business's profitability and liquidity. Refer in particular to the past figures shown above. Note that one point will be allocated for every formula quoted. (10) (10) (10) QUESTION ONE RATIOS The following financial information relates to Tasty Desserts Bakery at the end of their financial year: Extract from the general ledger: Date Details 2016 30 Cost of sales Nov. Profit and loss Date Details 2016 30 Rent expense Nov. Rates and services Telephone expense Interest expense Wages and salaries Internet expense Bank charges Settlement discount granted Office consumables Insurance expense Capital (Net profit) Land and buildings Equipment Trading Account Amount Available-for-sale financial asset: Fixed deposit Current assets Trading inventories Trade receivables Cash and cash equivalents Total assets 472 645.35 402 623.81 875 269.16 Profit and Loss Account Amount Owner's equity and liabilities Owner's equity Carlithi 27 570.98 15 317.21 16 227.49 6 126.88 38 511.84 4 376.35 Date 3 676.13 6 827.10 10 590.76 8 315.06 288 978.86 426 518.66 Additional information: 1. No capital contributions were made during the year. 2. Assume a 365-day year. 64 % of all sales are on credit. 3. Purchases constitute 60 % of cost of sales. 4. 48% of all purchases are on credit. 5. Net trade debtors balance on 1 December 2015 was R 25 120.22. 6. Net trade creditors balance on 1 December 2015 was R 19 527.25. 7. Trade inventory on hand as at 1 December 2015 was R 49 102.60. Statement of Financial Position of Tasty Desserts bakery on 30 November 2016 Assets Non-current assets Details Sales Cost price Date Details 2016 30 Trading account Nov. Services rendered Interest income 831 505.70 577 677.65 1 409 183.35 Accumulated depreciation 173 303.30 173 303.30 (30 MARKS) 48 139.80 30 634.42 21 006.46 1.080 570.06 Amount 875 269.16 875 269.16 Amount 402 623.81 13 129.04 10 765.81 426 518.66 Carrying value 831 505.70 404 374.36 1 235 880.06 96 279.61 1 332 159.66 99 780.68 1 431 940.35 1 339 161.82 Current assets Trading inventories Trade receivables Cash and cash equivalents Total assets Owner's equity and liabilities Owner's equity Capital Plus Net profit Less Drawings Non current liabilities Mortgage loan: Nesko Mortgage Current liabilities Trade creditors Amdex credit card Total equity and liabilities Comparative figures: Ratio Return on average owner's equity Current ratio Average trade debtors collection period Industry averages The return on average owner's equity for the industry is 60 % The current ratio for the industry is 2:1 The average trade debtors collection period for the industry is 24 days 1.1 Return on average owner's equity 1.2 Current ratio 1.3 Average trade debtor's collection period 58.00% 3:1 48 139 80 30 634.42 21 006.46 8 1 089 570.06 288 978.86 (39 387.11) 56 892.50 20 131.19 15 754.84 2015 51.00% 1.5:1 1 332 159.66 Ratio for the years ended 30 November 9 99 780.68 1 431 940.35 1 339 161.82 56 892.50 35 886.04 1 431 940.35 2014 REQUIRED: Calculate the following ratios for the year ended 30 November 2016 and comment on the business's profitability and liquidity. Refer in particular to the past figures shown above. Note that one point will be allocated for every formula quoted. (10) (10) (10) QUESTION ONE RATIOS The following financial information relates to Tasty Desserts Bakery at the end of their financial year: Extract from the general ledger: Date Details 2016 30 Cost of sales Nov. Profit and loss Date Details 2016 30 Rent expense Nov. Rates and services Telephone expense Interest expense Wages and salaries Internet expense Bank charges Settlement discount granted Office consumables Insurance expense Capital (Net profit) Land and buildings Equipment Trading Account Amount Available-for-sale financial asset: Fixed deposit Current assets Trading inventories Trade receivables Cash and cash equivalents Total assets 472 645.35 402 623.81 875 269.16 Profit and Loss Account Amount Owner's equity and liabilities Owner's equity Carlithi 27 570.98 15 317.21 16 227.49 6 126.88 38 511.84 4 376.35 Date 3 676.13 6 827.10 10 590.76 8 315.06 288 978.86 426 518.66 Additional information: 1. No capital contributions were made during the year. 2. Assume a 365-day year. 64 % of all sales are on credit. 3. Purchases constitute 60 % of cost of sales. 4. 48% of all purchases are on credit. 5. Net trade debtors balance on 1 December 2015 was R 25 120.22. 6. Net trade creditors balance on 1 December 2015 was R 19 527.25. 7. Trade inventory on hand as at 1 December 2015 was R 49 102.60. Statement of Financial Position of Tasty Desserts bakery on 30 November 2016 Assets Non-current assets Details Sales Cost price Date Details 2016 30 Trading account Nov. Services rendered Interest income 831 505.70 577 677.65 1 409 183.35 Accumulated depreciation 173 303.30 173 303.30 (30 MARKS) 48 139.80 30 634.42 21 006.46 1.080 570.06 Amount 875 269.16 875 269.16 Amount 402 623.81 13 129.04 10 765.81 426 518.66 Carrying value 831 505.70 404 374.36 1 235 880.06 96 279.61 1 332 159.66 99 780.68 1 431 940.35 1 339 161.82

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The financial documents youve provided are partially visible but they include the Statement of Financial Position for Tasty Desserts Bakery as of 30 November 2016 and some details about the Trading an... View the full answer