Kamau and Sons Ltd present you the following Liabilities Equity Share Capital 8% Preference Share Capital...

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Kamau and Sons Ltd present you the following Liabilities Equity Share Capital 8% Preference Share Capital Reserves Fund 6% Debentures Sundry Creditors Profit and Loss a/c BALANCE SHEET (as on 31st December, 2010). 2009 1,000 2010 20,000 Amount Assets 50,000 Fixed Assets 10,000 Bills Receivable 40,000 Stock 20,000 Sundry Debtor 30,000 Bank Balance 21,000 171,000 Preliminary Expenses Amount 87,500 25,000 30,000 13,500 7,000 8,000 171,000 The directors intend to transfer a sum of Shs. 5,000 out of the current year profit to provision for tax. You are required to calculate the following ratios and give your brief comments: i) Return on capital employed ratio. ii) Current ratio iii) Fixed assets to net worth iv) Debt to equity capital v) Return on owner's capital (2 marks) (2 marks) (2 marks) (2 marks) (2 marks) Kamau and Sons Ltd present you the following Liabilities Equity Share Capital 8% Preference Share Capital Reserves Fund 6% Debentures Sundry Creditors Profit and Loss a/c BALANCE SHEET (as on 31st December, 2010). 2009 1,000 2010 20,000 Amount Assets 50,000 Fixed Assets 10,000 Bills Receivable 40,000 Stock 20,000 Sundry Debtor 30,000 Bank Balance 21,000 171,000 Preliminary Expenses Amount 87,500 25,000 30,000 13,500 7,000 8,000 171,000 The directors intend to transfer a sum of Shs. 5,000 out of the current year profit to provision for tax. You are required to calculate the following ratios and give your brief comments: i) Return on capital employed ratio. ii) Current ratio iii) Fixed assets to net worth iv) Debt to equity capital v) Return on owner's capital (2 marks) (2 marks) (2 marks) (2 marks) (2 marks)

Answer rating: 100% (QA)

The detailed answer for the above question is provided below Answer i Return on capital employed rat... View the full answer