Question: Question 2 Below is a Statement of Financial Position for a small business as at the end of 2019 with the total liability and total

Question 2

Below is a Statement of Financial Position for a small business as at the end of 2019 with the total liability and total equity figures removed.

($000) ($000)

Current Assets Current Liabilities

Cash 6 Suppliers Accounts Payable 13

Inventory 24

Prepayments 7 Non-Current Liabilities

Fixed Interest Bank Loan 40

Non-Current Assets

Property, Plant & Equipment 40 Equity

Accumulated Depreciation (5) Contributed Capital 5

----- Retained Earnings ?

Total Assets 72

  1. Calculate the Retained Earnings. (2 marks)

Answer:

  1. Calculate the Current ratio. (2 marks)

Answer:

  1. Calculate the Quick ratio. (2 marks)

Answer:

  1. Calculate the Debt to Equity ratio. (4 marks)

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