The following information has been extracted from the accounts of Richard Branson Ltd. Profit and loss...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
The following information has been extracted from the accounts of Richard Branson Ltd. Profit and loss account for the year to 30 April 2006 Turnover (all credit sales) Less Cost of sales Gross profit Other expenses Loan interest Profit after taxation Taxation Profit after taxation Dividends (all ordinary shares) Retained profits Balance sheet at 30 April 2006 Fixed assets: Tangible assets Current assets: Stocks Trade debtors Cash Creditors- Amounts falling due within one year Net current assets Total assets less current liabilities Creditors Amounts falling due after more than one year: Loans and other borrowings Capital and reserves: Called-up share capital Profit and loss account 2005 GH¢000 7,650 (5,800) 1,850 (150) (50) 1,650 (600) 1,050 (300) 750 2005 GH₂000 10,050 1.500 1,200 900 3,600 (2,400) 1.200 11,250 (350) 10.900 5,900 5.000 10,900 2006 GH₂000 11.500 (9.430) 2,070 (170) (350) 1.550 (550) 1,000 (300) 700 2006 GH₂000 11.350 2.450 3,800 50 6,300 (2,700) 3.600 14.950 (3,350) 11.600 5,700 5.700 11,600 Additional information During the year to 30 April 2006 the company tried to stimulate sales by reducing the selling price of its products and by offering more generous credit terms to its customers Requirements (a) Calculate six accounting ratios, specifying the basis of your calculations, for each of the two years to 30 April 2005 and 2006 which will enable you to examine the company' From the information available to you, including the ratios calculated in part (a) of the question, comment upon the company's results for the year to 30 April 2006 under the heads of "profitability" and "efficiency". (b) The following information has been extracted from the accounts of Richard Branson Ltd. Profit and loss account for the year to 30 April 2006 Turnover (all credit sales) Less Cost of sales Gross profit Other expenses Loan interest Profit after taxation Taxation Profit after taxation Dividends (all ordinary shares) Retained profits Balance sheet at 30 April 2006 Fixed assets: Tangible assets Current assets: Stocks Trade debtors Cash Creditors- Amounts falling due within one year Net current assets Total assets less current liabilities Creditors Amounts falling due after more than one year: Loans and other borrowings Capital and reserves: Called-up share capital Profit and loss account 2005 GH¢000 7,650 (5,800) 1,850 (150) (50) 1,650 (600) 1,050 (300) 750 2005 GH₂000 10,050 1.500 1,200 900 3,600 (2,400) 1.200 11,250 (350) 10.900 5,900 5.000 10,900 2006 GH₂000 11.500 (9.430) 2,070 (170) (350) 1.550 (550) 1,000 (300) 700 2006 GH₂000 11.350 2.450 3,800 50 6,300 (2,700) 3.600 14.950 (3,350) 11.600 5,700 5.700 11,600 Additional information During the year to 30 April 2006 the company tried to stimulate sales by reducing the selling price of its products and by offering more generous credit terms to its customers Requirements (a) Calculate six accounting ratios, specifying the basis of your calculations, for each of the two years to 30 April 2005 and 2006 which will enable you to examine the company' From the information available to you, including the ratios calculated in part (a) of the question, comment upon the company's results for the year to 30 April 2006 under the heads of "profitability" and "efficiency". (b)
Expert Answer:
Answer rating: 100% (QA)
a 1 Gross profit margin 2 Net profit margin 3 Return on assets 4 Return on equity 5 Current ratio 6 ... View the full answer
Related Book For
Financial and Managerial Accounting
ISBN: 978-0538480895
11th Edition
Authors: Jonathan E. Duchac, James M. Reeve, Carl S. Warren
Posted Date:
Students also viewed these accounting questions
-
A company's share price is $23, the book value of its' equity is $112, it has 11 shares outstanding and the beta of its' shares is 0.9. The company's outstanding net debt has a market value of $105...
-
Maria and Andy worked well together to organize the accounting system and records of a growing Health Maintenance Organization (HMO). Bob and Connie, the two top executives in the HMO, were tightly...
-
Using the income statement for Escape Travel Service shown in Practice Exercise 1-4B, prepare a retained earnings statement for the current year ended November 30, 2012. Brett Daniels, the owner,...
-
Assess the following statement: Although many investors may be irrational, it is unlikely that over time they will behave irrationally in exactly the same way such as always buying stocks the day...
-
On the basis of the rates schedules in Appendix C, determine the marginal tax rate for: a. A corporation with $23,000 taxable income. b. A corporation with $250,000 taxable income. c. A single...
-
Which of the following DFD presents an implementation-independent view of the system under development? (a) Logical (c) Context level (b) Physical (d) Temporal
-
Regents Supply completed the following selected transactions during the year: Requirements 1. Open T-accounts for Allowance for Uncollectible Accounts and Uncollectible Accounts Expense. These...
-
The City of Bedford is studying a 600-acre site on Route 356 for a new landfill. The startup cost has been calculated as follows: Purchase cost: ........$450 per acre Site preparation:...
-
es State University Business School (SUBS) offers several degrees, including Bachelor of Business Administration (BBA). The new dean believes in using cost accounting information to make decisions...
-
A beam of T section is supported and loaded as shown. a) (15 pts) Construct the shear and bending moment diagram, provide expressions for the shear and bending moment on each segment, provide graphs,...
-
Automated teller machines (ATMs) are categorized as: Transaction processing systems Decision support systems Operating systems Data acquisition systems to this answ
-
The South American cocaine industry consists of several families that obtain the raw material, refine it, and distribute it in the United States. There are only about three large families, but there...
-
What does a loss of consumer surplus mean? In the case of exercises 1012, exactly how do the losses of consumer surplus occur? Data from in exercise 10 The FDA is considering the adoption of a higher...
-
Two parallel rods having length \(12 \mathrm{~cm}\) and a separation of \(50 \mathrm{~cm}\) carry current from left to right. If current through wire 1 is \(10 \mathrm{~A}\) and through wire 2 is...
-
A new spray-painting system is being evaluated for the auto industry. The paint is delivered via an atomizer that produces \(10 \mu \mathrm{m}\) particles and propels them toward the surface at a...
-
Elephants eat 300 pounds of food per day. They flourished in Africa when they could roam over huge areas of land, eating the vegetation in one area and then moving on so that the vegetation could...
-
An element of a matrix is said to be "Saddle Point" if it is the strictly largest element (max) in its row and the strictly smallest element (min) in its column. For example, the matrix shown below...
-
With your classmates, form small teams of skunkworks. Your task is to identify an innovation that you think would benefit your school, college, or university, and to outline an action plan for...
-
On September 25, 2012, Lucas Corporation had a market price per share of common stock of $8. For the previous year, Lucas paid an annual dividend of $0.16. Compute the dividend yield for Lucas...
-
Cost of merchandise sold reported on the income statement was $210,000. The accounts payable balance increased $8,600, and the inventory balance increased by $16,900 over the year. Determine the...
-
During the current year, merchandise is sold for $775,000. The cost of the merchandise sold is $426,250. a. What is the amount of the gross profile? b. Compute the gross profile percentage (gross...
-
The circuit in Figure 8.31 is to be designed such that the quiescent collector currents are \(4 \mathrm{~mA}\left(v_{O}=0 ight)\). Assume \(I_{S Q}=2 \times 10^{-15} \mathrm{~A}\) and \(I_{S D}=\)...
-
The value of \(I_{\text {Bias }}\) in the circuit shown in Figure 8.31 is \(0.5 \mathrm{~mA}\). Assume diode and transistor parameters of \(I_{S D 1}=10^{-16} \mathrm{~A}, I_{S D 2}=4 \times 10^{-16}...
-
Using the parameters given in Example 8.11 for the circuit in Figure 8.34, calculate the input resistance when the quiescent output voltage is zero. iB1 www R JiEI 23 R3 iB2 R4 Q2 iE2 Q4 ww R 150 ww...
Study smarter with the SolutionInn App