The following information is extracted from the 2018, 2019 and 2020 financial report of a business.

	2018	2019	2020
Non-current Assets		285,500	390,500
Total Assets	297,900	351,200	470,200
Non-current liabilities		154,900	162,200
Net Assets		171,200	292,700
Total Revenue		167,500	154,300
Total Expenses		107,000	66,200

 

For Parts a), b), c), and d), Round your answer to the nearest 0.01% (2dp). Do not include the % symbol. Do not use comma separators. For example, if your answer is 0.12345, 12.35 would be the correct format.

1. (1 mark) Calculate the Return on Assets for the 2019 financial year.

   Answer%

2. (1 mark) Calculate the Return on Assets for the 2020 financial year.

   Answer%

3. (1 mark) Calculate the Profit Margin for the 2019 financial year.

   Answer%

4. (1 mark) Calculate the Profit Margin for the 2020 financial year.

   Answer%

   (1 mark) Calculate the Current ratio for the 2019 financial year.

5. Answer:1

6. (1 mark) Calculate the Current ratio for the 2020 financial year.

   Answer:1

7. (1 mark) Calculate the Debt to Total Assets ratio for the 2019 financial year.

   Answer:1

8. (2 marks) Which one of the following transactions can immediately improve the Current Ratio?

    

   Repay a loan due in 3 years.

   Owner contributes a vehicle to the business.

   Provide services for cash received and recorded before.

   Purchase supplies using cash.

   Purchase equipment on credit.

   None of the transactions can improve the Current Ratio.

    

9. (2 marks) Which one of the following transactions can immediately improve the Debt to Total Assets ratio?

    

   Record supplies consumed during the financial year.

   Record depreciation for company vehicle.

   None of the transactions can improve the Debt to Total Assets ratio.

   Record unpaid wages.

   Owner contributes furniture to the business.

   Pay electricity expense.

    

10. (2 mark) Which one of the following would apply to the liquidity of the business?

     

    None of the statements are true.

    Liquidity has increased over time and both years’ liquidity is above the rule of thumb.

    Liquidity has decreased over time and only 2019’s liquidity is above the rule of thumb.

    Liquidity has increased over time and only 2020’s liquidity is above the rule of thumb.

    Liquidity has decreased over time and both years’ liquidity is above the rule of thumb.

    Liquidity has remained the same over time so the rule of thumb is irrelevant.

Answer rating: 100% (QA)

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