The following extracts of final accounts relate to Huddlestone Ltd. End of Year 1 000 Fixed...

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The following extracts of final accounts relate to Huddlestone Ltd. End of Year 1 £000 Fixed assets (net book value) Current assets Stock Trade debtors Cash at bank Less: Current liabilities Trade creditors Bank overdraft Net assets Capital account Balance at start of the year Net profit for year Balance at end of the year Sales (all on credit) Cost of sales Gross profit 1 year - 365 days Required 105 105 50 (i) stock turnover (number of days) 120 NIL £000 640 (v) current ratio (to two decimal places) 260 (ii) debtors collection period (number of days) (iv) creditors repayment period (number of days) 120 780 (a) Calculate the following for each of the two years net asset turnover (times) (to two decimal places) 670 110 780 1,380 966 414 End of Year 2 £000 £000 720 160 280 NIL 160 145 440 1,160 305 855 780 75 855 1,436 1,077 359 (vi) acid test (quick) ratio (to two decimal places). (b) Using all the ratios calculated in (a), as well as the financial information provided in the extracts of the final accounts, assess the efficiency (use of assets) and liquidity of the company over the two year period. a (2) (2) (2) (2) 181 The following extracts of final accounts relate to Huddlestone Ltd. End of Year 1 £000 Fixed assets (net book value) Current assets Stock Trade debtors Cash at bank Less: Current liabilities Trade creditors Bank overdraft Net assets Capital account Balance at start of the year Net profit for year Balance at end of the year Sales (all on credit) Cost of sales Gross profit 1 year - 365 days Required 105 105 50 (i) stock turnover (number of days) 120 NIL £000 640 (v) current ratio (to two decimal places) 260 (ii) debtors collection period (number of days) (iv) creditors repayment period (number of days) 120 780 (a) Calculate the following for each of the two years net asset turnover (times) (to two decimal places) 670 110 780 1,380 966 414 End of Year 2 £000 £000 720 160 280 NIL 160 145 440 1,160 305 855 780 75 855 1,436 1,077 359 (vi) acid test (quick) ratio (to two decimal places). (b) Using all the ratios calculated in (a), as well as the financial information provided in the extracts of the final accounts, assess the efficiency (use of assets) and liquidity of the company over the two year period. a (2) (2) (2) (2) 181

Answer rating: 100% (QA)

a Calculate the following for each of the two years i Net asset turnover times to two decimal places Year 1 1380 780 177 times Year 2 1077 855 126 tim... View the full answer