Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Income Statement for the years ending 31 August:
                                           2020                                               2019
                                               £                                                      £
Revenue                               950,000                                         975,000
Cost of sales                        455,000                                         460,000
Gross profit                         495,000                                          515,000
Total expenses                    320,000                                           310,000
Net profit                            175,000                                           205,000

Statement of financial position as at 31 August:
                                              2020                                                 2019
£ £
Non-current assets               70,000                                              65,000
Current assets
Cash at bank                         45,000                                              55,000
Inventory                              22,000                                               20,000
Trade receivables                 15,000                                                10,000
Total current assets              82,000                                                 85,000
Total assets                          152,000                                               150,000
Non-current liabilities          23,000                                                 26,000
Current liabilities
Trade payables                     40,000                                                  30,000
Total liabilities                       63,000                                                 56,000
Net Assets                             89,000                                                 94,000
Equity
Share capital                         200,000                                               200,000
Retained earnings                 175,000                                               205,000
Total Equity                            89,000                                                94,000

 

Calculate the following accounting ratios for the two years 2019 and 2020 respectively:
(i) Gross profit margin
(ii) Net profit margin
(iii) Current ratio
(iv) Quick ratio
(v) Trade receivable days
(vi) Trade payable days
(vii) Inventory turnover days

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