Table 1 summarises information for TUI, a business operating in the retail sector. Table 1: RTI...
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Table 1 summarises information for TUI, a business operating in the retail sector. Table 1: RTI Ltd. Revenue Net Income Current Assets (total) Current Liabilities (total) Inventories Receivables Cash Payables Tax Due Overdraft 2020 39,000 2,150 4,750 3,000 2,900 125 (ii) 1,700 1,580 1,480 0 Note: The company opened a third store during 2021. (i) 2021 55,000 1,875 5,990 5,250 5,295 210 0 3,580 1,190 550 Analyse the liquidity of the above business in as much detail as the information permits. Explain how the method of inventory valuation method adopted by the company may impact the profitability and liquidity ratios we have looked at in this module. (20 Marks) Table 1 summarises information for TUI, a business operating in the retail sector. Table 1: RTI Ltd. Revenue Net Income Current Assets (total) Current Liabilities (total) Inventories Receivables Cash Payables Tax Due Overdraft 2020 39,000 2,150 4,750 3,000 2,900 125 (ii) 1,700 1,580 1,480 0 Note: The company opened a third store during 2021. (i) 2021 55,000 1,875 5,990 5,250 5,295 210 0 3,580 1,190 550 Analyse the liquidity of the above business in as much detail as the information permits. Explain how the method of inventory valuation method adopted by the company may impact the profitability and liquidity ratios we have looked at in this module. (20 Marks)
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i Analysis of Liquidity Liquidity refers to a companys ability to meet its shortterm obligations as they come due Key liquidity ratios include the current ratio and the quick ratio Current Ratio Curre... View the full answer
Related Book For
Understanding Financial Accounting
ISBN: 978-1118849385
1st Canadian Edition
Authors: Christopher Burnley, Robert Hoskin, Maureen Fizzell, Donald
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