Discuss three financial ratios you might consider if you were a supplier to King's Motors Ltd...

  

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Discuss three financial ratios you might consider if you were a supplier to King's Motors Ltd and they asked for £10,000,000 of purchases on credit in 2021. Please ensure to justify your chosen ratios and state whether you agree to this deal? Please ensure in your answers to make clear what insights can be drawn from each of your chosen ratios. Please also discuss what further information you would request from or about King's Motors PLC's before offering your product or services on credit? King's Motors PLC LSE Motors PLC 2020 2021 2020 2021 3. 900,000,000 950,000,000 300,000,000 320,000,000 120,000,000 160,000,000 (20,000,000) (30,000,000) 100,000,000 130,000,000 3. 132,000,000 Revenue 26,000,000 Revenue Gross Profit 15,000,000 (35,000,000) (2,000,000) (37,000,000) 4,000,000 80,000,000 12,000,000 (8,000,000) Gross Profit Operating Profit Interest Expense Profit for The Year Operating Profit Interest Expense Profit for The Year Trade Receivables 25,000,000 Trade Receivables Inventories 3,000,000 5,000,000 36,000,000 5,000,000 4,000,000 5,000,000 7,000,000 19,000,000 12,000,000 60,000,000 18,000,000 35,000,000 25,000,000 11,000,000 30,000,000 80,000,000 90,000,000 50,000,000 60,000,000 120,000,000 150,000,000 250,000,000 400,000,000 250,000,000 300,000,000 200,000,000 285,000,000 Inventories Cash Cash Trade Payable Long term Loan Share Capital (£100) Retained Earnings Trade Payable Long term Loan Share Capital (E10) Retained Earnings 45,000,000 Dividends (Total Payout) Share Price (per share) Cash from operations Dividends (Total Payout) 30,000,000 Share Price (per share) Cash from operations 670 650 20 100 (35,000,000) (50,000,000) 2,000,000 6,000,000 Discuss three financial ratios you might consider if you were a supplier to King's Motors Ltd and they asked for £10,000,000 of purchases on credit in 2021. Please ensure to justify your chosen ratios and state whether you agree to this deal? Please ensure in your answers to make clear what insights can be drawn from each of your chosen ratios. Please also discuss what further information you would request from or about King's Motors PLC's before offering your product or services on credit? King's Motors PLC LSE Motors PLC 2020 2021 2020 2021 3. 900,000,000 950,000,000 300,000,000 320,000,000 120,000,000 160,000,000 (20,000,000) (30,000,000) 100,000,000 130,000,000 3. 132,000,000 Revenue 26,000,000 Revenue Gross Profit 15,000,000 (35,000,000) (2,000,000) (37,000,000) 4,000,000 80,000,000 12,000,000 (8,000,000) Gross Profit Operating Profit Interest Expense Profit for The Year Operating Profit Interest Expense Profit for The Year Trade Receivables 25,000,000 Trade Receivables Inventories 3,000,000 5,000,000 36,000,000 5,000,000 4,000,000 5,000,000 7,000,000 19,000,000 12,000,000 60,000,000 18,000,000 35,000,000 25,000,000 11,000,000 30,000,000 80,000,000 90,000,000 50,000,000 60,000,000 120,000,000 150,000,000 250,000,000 400,000,000 250,000,000 300,000,000 200,000,000 285,000,000 Inventories Cash Cash Trade Payable Long term Loan Share Capital (£100) Retained Earnings Trade Payable Long term Loan Share Capital (E10) Retained Earnings 45,000,000 Dividends (Total Payout) Share Price (per share) Cash from operations Dividends (Total Payout) 30,000,000 Share Price (per share) Cash from operations 670 650 20 100 (35,000,000) (50,000,000) 2,000,000 6,000,000