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Using two measures of liquidity (current ratio and quick or acid test ratio), discuss whether there were significant differences in performance between the two companies and whether there were warning signs of JBB Sports' potential failure

Using two measures of liquidity (current ratio and quick or acid test ratio), discuss whether there were significant differences in performance between the two companies and whether there were warning signs of JBB Sports' potential failure

Financial Management: Theory & Practice
Financial Management: Theory & Practice
16th Edition
ISBN:9781337909730
Author:Brigham
Publisher:Brigham
Chapter2: Financial Statements, Cash Flow,and Taxes
Section: Chapter Questions
Problem 1Q: Define each of the following terms: Annual report; balance sheet; income statement Common...
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Using two measures of liquidity (current ratio and quick or acid test ratio), discuss whether there were significant differences in performance between the two companies and whether there were warning signs of JBB Sports' potential failure

Balance Sheet as at Non-current assets Intangible assets Property, plant and equipment Investments in associated undertakings & joint ventures Other assets Total non-current assets Current assets Inventories Trade receivables Other receivables Cash and cash equivalents Total current assets Total assets Current liabilities Borrowings Trade payables Other payables Total current liabilities Non-current liabilities Borrowings Other payables Total non-current liabilities Total liabilities Net assets Capital and reserves Share capital Share premium account Other reserves Retained earnings Total equity Average number of employees JJB Sports JJB Sports Sports Direct ple ple PLC PLC 29-Jan-12 30-Jan-11 20-Apr-12 24-Apr-11 £'000 £'000 £'000 £'000 24,201 46,091 70,292 47,302 983 6,809 4,638 59.732 130,024 33,971 64,859 34,824 258,221 1,860 98,830 52,725 448 8,629 5,859 (263,931) 30.974 5,108 (-) (9,303) (17,712) (38,471) (155,468) (35,423) (36,662) (172,940) (53,135) (75,133) (337,711) 225,150 313,023 67,661 485,277 166,491 1,132,179 (99,050) (122,420) (660,294) (30,974) (44,071) (471,885) 29,470 79,259 646,902 32,542 174,055 276 316,800 44,122 39,755 84,600 (162,802) 44,071 6,701 (15,915) (24,678) (214,587) (196,182) (30,000) (22,609) (107,996) (102,701) (45.915) (47.287) (322,583) (298,883) (585,055) (331,135) Sports Direct 600,431 471,885 205,050 236,097 12,145 38,347 66,540 546,034 217,938 47,594 44,111 60,513 370,156 916,190 (13,219) (95,700) (177,253) (286,172) 64,060 874,300 (1,066,906) (1,048,151) 440,931 331,135 64,055 874,300 10,312
Transcribed Image Text:Balance Sheet as at Non-current assets Intangible assets Property, plant and equipment Investments in associated undertakings & joint ventures Other assets Total non-current assets Current assets Inventories Trade receivables Other receivables Cash and cash equivalents Total current assets Total assets Current liabilities Borrowings Trade payables Other payables Total current liabilities Non-current liabilities Borrowings Other payables Total non-current liabilities Total liabilities Net assets Capital and reserves Share capital Share premium account Other reserves Retained earnings Total equity Average number of employees JJB Sports JJB Sports Sports Direct ple ple PLC PLC 29-Jan-12 30-Jan-11 20-Apr-12 24-Apr-11 £'000 £'000 £'000 £'000 24,201 46,091 70,292 47,302 983 6,809 4,638 59.732 130,024 33,971 64,859 34,824 258,221 1,860 98,830 52,725 448 8,629 5,859 (263,931) 30.974 5,108 (-) (9,303) (17,712) (38,471) (155,468) (35,423) (36,662) (172,940) (53,135) (75,133) (337,711) 225,150 313,023 67,661 485,277 166,491 1,132,179 (99,050) (122,420) (660,294) (30,974) (44,071) (471,885) 29,470 79,259 646,902 32,542 174,055 276 316,800 44,122 39,755 84,600 (162,802) 44,071 6,701 (15,915) (24,678) (214,587) (196,182) (30,000) (22,609) (107,996) (102,701) (45.915) (47.287) (322,583) (298,883) (585,055) (331,135) Sports Direct 600,431 471,885 205,050 236,097 12,145 38,347 66,540 546,034 217,938 47,594 44,111 60,513 370,156 916,190 (13,219) (95,700) (177,253) (286,172) 64,060 874,300 (1,066,906) (1,048,151) 440,931 331,135 64,055 874,300 10,312
3. The Data Consolidated Income Statement For period ended Revenue Cost of sales Gross profit Selling, distribution & administrative expenses Other operating income Operating profit (loss) Investment income (costs) Finance income Finance costs Financial instrument adjustment & issue costs Share of profit (loss) of associated undertakings & joint ventures Profit (loss) before tax JJB Sports JJB Sports Sports Direct Sports Direct ple ple PLC 29-Jan-12 £'000 24-Apr-11 £'000 284,206 (182,722) 101,484 (566) PLC 30-Jan-11 20-Apr-12 £'000 £'000 (160,408) (200,578) (596,383) 2,682 1,848 5,283 153,176 (56,242) (73,856) 113 512 (5,800) 6,426 (8,481) 2,774 362,894 1,835,756 (238,020) (1,091,480) 124,874 744,276 (1,162) 1,097 558 (53,921) (73,409) 145,879 1,599,237 (940,330) 658,907 (527,273) 5,289 136,923 (9,481) 2,560 (8,953) 121,041
Transcribed Image Text:3. The Data Consolidated Income Statement For period ended Revenue Cost of sales Gross profit Selling, distribution & administrative expenses Other operating income Operating profit (loss) Investment income (costs) Finance income Finance costs Financial instrument adjustment & issue costs Share of profit (loss) of associated undertakings & joint ventures Profit (loss) before tax JJB Sports JJB Sports Sports Direct Sports Direct ple ple PLC 29-Jan-12 £'000 24-Apr-11 £'000 284,206 (182,722) 101,484 (566) PLC 30-Jan-11 20-Apr-12 £'000 £'000 (160,408) (200,578) (596,383) 2,682 1,848 5,283 153,176 (56,242) (73,856) 113 512 (5,800) 6,426 (8,481) 2,774 362,894 1,835,756 (238,020) (1,091,480) 124,874 744,276 (1,162) 1,097 558 (53,921) (73,409) 145,879 1,599,237 (940,330) 658,907 (527,273) 5,289 136,923 (9,481) 2,560 (8,953) 121,041
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