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Assignment Ratio Analysis

Assignment Ratio Analysis

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09/28/2012

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TABLE OF CONTENT

NUM. CONTENTS
1. APRIL 2009

PAGES
2–4

2.

OCTOBER 2009

5–7

3.

APRIL 2011

8 – 11

Page | 1

000 60.000 12.000 Add: Purchase 150. Return on investment.000 Less: Cost Of Goods Sold Opening stock 26.000 32.000 Expenses 19.000 92. Managers ii.000 Less: Closing Stock 14.000 71. Creditors. Net profit margin iii. Page | 2 .APRIL 2009 QUESTION 5 The summarized Income Statement for the year ended 31 December 2008 and the Balance Sheet as at 31 December 2008 for Huzai Trading were as follows: HUZAI TRADING Income Statement for the year ended 31 December 2008 RM Sales 220.000 8.000 Required: a) Calculate and comment on the following ratios for Huzai Trading: i.000 Gross profit 30.000 Net profit 11.000 176. b) Explain why these users need financial accounting information: i. Acid test ratio ii.000 HUZAI TRADING Balance Sheet as at 31 December 2008 RM 60.000 RM RM Non-Current Asset Current Asset Inventory Accounts Receivable Cash Owner's Equity Capital Net Profit Non-Current Liabilities Loan Current Liabilities Accounts Payable 14. Stock turnover iv. Owner iii.000 11.000 9.000 92.000 190.000 10.

000 = 0.000 x 100% 220.05 : 1 iii.000 = 2:1 ii.000 ( 26.000 – 14.000 – 14.000 6000 = 27 times Page | 3 .ANSWERS: a) i.000 ) 2 = 162.000 – 14. Net profit margin = Net profit x 100% Net sales = 11. Stock turnover Inventory turnover ratio = Cost of goods sold Average stock = Purchase – purchase return + opening inventory – closing inventory ( Opening stock + closing stock ) 2 = 150. Acid test ratio = current asset – closing inventory – prepaid expenses current liability = 32.000 – 0 9.000 – 0 + 26.

Creditors : To overcome and improve financial situation in the future.000 x 100% 65.000_____ x 100% (71.0 ) 2 11.000_______ x 100% 60.000) 2 = = 11.000 + (60. Return on investment Net profit __ = Net profit___________ x 100% Capital employed ( opening capital + closing capital ) 2 = 11.000 + 11.500 = 0. Owner : To measure the efficiency of the business operation.8% b) i.000 + 60.iv. Managers: To analyse the performance of the company.168 x 100% = 16. iii. ii.000 . Page | 4 .

000 RM45.000 Using the above information. Sales Expenses Revenue Current liability Current asset excluding stock Additional information: Sales return is 10% of total sales Cost of sales is 25% of net sales Stock turnover ratio is 5 times Opening stock is RM20. Closing stock iv.000 RM54.000 RM30.000 RM28. Current Ratio RM350.500 Page | 5 . Gross Profit Ratio ii.OCTOBER 2009 QUESTION 4 Below is the information appearing on 31 December 2008 that has been extracted from an Enterprise. calculate: i. Net Profit Ratio iii.

000 – 78.71% Page | 6 .000 = 0.000 = 191.750 Gross profit ratio = Gross profit x 100% Net sales = (Net sales – cost of goods sold) x 100% (sales – sales returned) = 315.000) x 100% 315.ANSWERS: i.000) 100 = 78.75 x 100% = 75% ii.000 100 = 35.000 – 35.expense) x 100% Net sales = (236.750 x 100% 315.250 x 100% 315.000 = 60. Net profit ratio Net profit ratio = Net profit x 100% Net sales = (gross profit .250 – 45. Gross profit ratio Sales returned Sales returned = 10% x sales = 10 x 350.000 Cost of goods sold = 25% x Net sales = 25% x (sales – sales returned) = 25 x (350.

000 + closing stock) 2 5= 5 x (20.500 + 11.750 2 5 20.750 2 (20.000 + closing stock) = 78.750________ (20. Closing stock Inventory turnover ratio = Cost of goods sold Average stock = cost of goods sold______ (Opening stock + closing stock) 2 78.500 Closing stock = 11.000 + closing stock) = 78.000 + closing stock = 31.2 : 1 Page | 7 . Current ratio current ratio = current asset current liability = 54.000 = 2.iii.500 30.500 iv.

050 (v) 10.240 (vi) 13.APRIL 2011 QUESTION 4 Spicecraft Trading had the following financial statements as at 31 March 2011: Spicecraft Trading Income Statement for the year ended 31 March 2011 RM RM (i) 105.000 32.240 (viii) 92.000 (iv) 75.850 (vi) 13.000 42.440 29.240 Page | 8 .000 (iii) 63.000 15.000 (ii) 44.210 Spicecraft Trading Balance Sheet as at 31 March 2011 RM RM (vii) 72.240 59.500 5.210 4.620 131.000 Sales Less: Cost Of sales Opening inventories Add: Purchases Less: Closing inventories Cost of goods sold Gross profit Less: Operating expenses Administrative Selling and distribution Financial Net profit 13.000 Non-Current Asset Current Asset Inventory Accounts Receivable Owner's Equity Capital Add: Net Profit Less: Drawings Current Liabilities Creditors (iii) 44.

Current ratio is 2:1. calculate the percentage increase or decrease on net profit of Spicecraft Trading. Selling expenses is 10% of sales. Required: a) Complete the financial statements above. but purchases increased by 5%. Gross profit ratio is 40%. Show the workings. 2.Additional information: 1. b) If all expenses remained unchanged. Page | 9 . 3.

000 + 15.000 – 42.240 = 44.620 = 59.240 – 15.ANSWERS: Gross profit ratio = Gross profit x 100% Net sales 40% = 42.000 = 63.210 (vi) Net profit Page | 10 .000 (i) Selling expense = 10% of sales = 10 x 105.000 (iii) – income statement Non-current assets = 131.28.000 100 = 10.790 = 13. 240 = 59.000 .000_ Net sales 0.000 (vii) Current assets = inventories + account receivable = 44.240 = 72.(13.4 Net sales = 42. 240 = 59.050 + 10.500 + 5.000 (iii) – balance sheet Current assets Inventories Gross profit = Net sales – cost of goods sold Cost of goods sold = Net sales – Gross profit = 105.240 -59.000 .240 = gross profit – expenses = 42.240) = 42.500 (v) Current ratio = Current assets Current liabilities 2 = current assets 29.000 Net sales = 105.

000 – 63.440 + 29.210 – 4.240 – (13.Capital = net profit – drawing + creditor = 13.000 Purchase = 63.000 (iv) Cost of goods sold = opening inventory + purchase – closing inventory 63.000 + purchase – 44.620) = 92.620 = 131.000 – closing inventory Closing inventory = 32.210 – 4.000 (ii) Page | 11 .000 – 32. 850 (viii) Owner’s equity Cost of goods sold = opening inventory + purchase – closing inventory 63.000 + 75.000 + 44.000 + 75.000 = 32.000 = 75.000 = 44.000 = 32.440 + 29.

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