Income statement for the year ended 31 December. 2021 '000 2022 '000 Turnover 14,006.00 22,410.00 Cost of
Question:
Income statement for the year ended 31 December.
2021 '000 | 2022 '000 | ||
Turnover | 14,006.00 | 22,410.00 | |
Cost of sales | (7,496.00) | (11,618.00) | |
Gross profit | 6,510.00 | 10,792.00 | |
Operating expenses | (4,410.00) | (6,174.00) | |
Operating profit | 2,100.00 | 4,618.00 | |
Interest payable | (432.00) | (912.00) | |
Profit before taxation | 1,668.00 | 3,706.00 | |
Taxation | (420.00) | (780.00) | |
Profit for the year | 1,248.00 | 2,926.00 | |
Statement of financial position as at 31 December | |||
2021 '000 | 2022 '000 | ||
ASSETS | |||
Non-current assets | 8,600.00 | 16,470.00 | |
Current assets | |||
Inventories | 2,418.00 | 4,820.00 | |
Trade receivables | 1,614.00 | 2,744.00 | |
Other receivables | 268.00 | 402.00 | |
Cash | 56.00 | 8.00 | |
4,356.00 | 7,974.00 | ||
Total assets | 12,956.00 | 24,444.00 | |
EQUITY AND LIABILITIES | |||
Equity | |||
Ordinary shares of 0.50 each | 3,600.00 | 3,600.00 | |
Capital reserves | 1,904.00 | 1,904.00 | |
Retained earnings | 1,370.00 | 3,496.00 | |
6,874.00 | 9,000.00 | ||
Non-current liabilities | |||
Loan notes | 3,600.00 | 7,600.00 | |
Current liabilities | |||
Trade payables | 1,214.00 | 2,612.00 | |
Other payables | 848.00 | 1,202.00 | |
Taxation | 420.00 | 780.00 | |
Bank Overdraft | 3,250.00 | ||
2,482.00 | 7,844.00 | ||
Total equity and liabilities | 12,956.00 | 24,444.00 | |
Note: the firm hopes to retain the overdraft on a semi-permanent basis |
Required:
1.Calculate the following financial ratios for the firm for 2021 and 2022.
(a). Return on capital employed.
(b). Return on ordinary shareholders' funds.
(c). Gross profit margin
(d). Operating profit margin
(e). Inventories turnover period
(f). Settlement period for trade receivables (days).
(g). Current ratio
(h). Quick ratio
(i). Financial leverage ratio
2.Use these ratios to comment on the performance and position of the firm from the point of view of:
(a). a 10% owner of the equity
(b). the business's bank.
Solve this Problem with proper calculations and tables and dont use AI You are financial analyst at Moryma Tia Plc. The finance director has provided you with the are the financial statement of The Firm for 2021 and 2022.
Expert Answer:
To calculate the financial ratios for the firm for 2021 and 2022 well use the provided financial statement information Here are the calculations and the ratios 1 Financial Ratios a Return on Capital E... View the full answer
Financial Accounting for Decision Makers
ISBN: 978-0273763451
6th Edition
Authors: Peter Atrill, Eddie McLaney
