Accounting QUESTION 3 BJs Ltd manufactures products that are used in the construction industry. The company has been successful in the management of its working capital and liquidity. However, 2020 has been different. Calculate the working capital and liquidity ratios for BJs Ltd given the following financial information The following is an extract of the trading account in the income statement: 2020 2019 R'000 R'000 Sales 2,065 1,789 Cost of sales (1,479) (1,304) Gross profit 586 485 Extract Statement From financial position Assets 2020 2019 R'000 R'000 Current Assets Inventory 119 109 Debtors (refer to note1) 401 347 Short term investments 4 19 Cash 48 48 572 523 EQUITY AND LIABILITIES Noncurrent liabilities 49 35 Taxes 62 47 Dividend 19 14 Creditors (refer to note 2) 371 324 501 420 Net current assets 71 103 Notes 1. Ammount of trades receivable in debtors amount 330 285 2.Amount of trades payables in creditors amount 226 211 3.1 Calculate liquidity and working capital ratios. (posted separate) 3.2 Comment on the calculated ratios. ( on liquidity ratios plus on working capital ratios)
Accounting QUESTION 3 BJs Ltd manufactures products that are used in the construction industry. The company has been successful in the management of its working capital and liquidity. However, 2020 has been different. Calculate the working capital and liquidity ratios for BJs Ltd given the following financial information The following is an extract of the trading account in the income statement: 2020 2019 R'000 R'000 Sales 2,065 1,789 Cost of sales (1,479) (1,304) Gross profit 586 485 Extract Statement From financial position Assets 2020 2019 R'000 R'000 Current Assets Inventory 119 109 Debtors (refer to note1) 401 347 Short term investments 4 19 Cash 48 48 572 523 EQUITY AND LIABILITIES Noncurrent liabilities 49 35 Taxes 62 47 Dividend 19 14 Creditors (refer to note 2) 371 324 501 420 Net current assets 71 103 Notes 1. Ammount of trades receivable in debtors amount 330 285 2.Amount of trades payables in creditors amount 226 211 3.1 Calculate liquidity and working capital ratios. (posted separate) 3.2 Comment on the calculated ratios. ( on liquidity ratios plus on working capital ratios)
Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter9: Metric-analysis Of Financial Statements
Section: Chapter Questions
Problem 9.4.10P: Twenty metrics of liquidity, solvency, and profitability The comparative financial statements of...
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Accounting
QUESTION 3
BJs Ltd manufactures products that are used in the construction industry. The company has been successful in the management of its
The following is an extract of the trading account in the income statement:
| 2020 | 2019 | |
| R'000 | R'000 | |
| Sales | 2,065 | 1,789 |
| Cost of sales | (1,479) | (1,304) |
| Gross profit | 586 | 485 |
Extract Statement From financial position
| Assets | 2020 | 2019 |
| R'000 | R'000 | |
| Current Assets | ||
| Inventory | 119 | 109 |
| Debtors (refer to note1) | 401 | 347 |
| Short term investments | 4 | 19 |
| Cash | 48 | 48 |
| 572 | 523 | |
| EQUITY AND LIABILITIES | ||
| Noncurrent liabilities | 49 | 35 |
| Taxes | 62 | 47 |
| Dividend | 19 | 14 |
| Creditors (refer to note 2) | 371 | 324 |
| 501 | 420 | |
| Net current assets | 71 | 103 |
| Notes | ||
| 1. Ammount of trades receivable in debtors amount | 330 | 285 |
| 2.Amount of trades payables in creditors amount | 226 | 211 |
3.1 Calculate liquidity and working capital ratios. (posted separate)
3.2 Comment on the calculated ratios. ( on liquidity ratios plus on working capital ratios)
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