» Sat Jun 18, 2011 3:31 am
So this is all information I have about the business:
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Active Daily Limited is to raise an additional $50,000 from the bank by way of a long term loan and an overdraft to finance the expansion of its premises and the purchase of freezers for its business activity.
2009
Purchases: 72,000
Sales: 225,000
Cost of goods sold: 70,000
Expenses: 110,000
2010
Purchases: 95,000
Sales: 278,000
Cost of goods sold: 93,000
Expenses: 117,000
2009
FIXED ASSETS
Premises: 100,000
Equipment: 65,000
Motor Vehicles: 40,500
TOTAL: 205,500
CURRENT ASSETS
Stock: 3,500
Debtors: 30,000
TOTAL: 33,500
CURRENT LIABILITIES
Creditors: 10,000
Bank overdraft: 14,000
TOTAL: 24,000
Working capital: 9,500
Net Assets: 215,000
FINANCED BY
Authorised and Issued Share Capital: 100,000 Ordinary share of $1 each fully paid: 100,000
Reservecs: 80,000
Shareholders' Funds: 180,000
Long Term Liabilities
Long term loan: 35,000
TOTAL: 215,000
2010
FIXED ASSETS
Premises: 98,000
Equipment: 90,250
Motor Vehicles: 77,450
TOTAL: 265,700
CURRENT ASSETS
Stock: 5,500
Debtors: 31,300
TOTAL: 36,800
CURRENT LIABILITIES
Creditors: 12,000
Bank overdraft: 10,000
TOTAL: 22,000
Working capital: 14,800
Net Assets: 280,500
FINANCED BY
Authorised and Issued Share Capital: 100,000 Ordinary share of $1 each fully paid: 100,000
Reserves: 148,800
Shareholders' Funds: 248,000
Long Term Liabilities
Long term loan: 32,500
TOTAL: 280,500
Now the ratios:
Gross profit ratio:
2009: 68.89%
2010: 66.55%
Net profit ratio:
2009: 20%
2010: 24.46%
ROCE
2009: 20.93%
2010: 24.24%
Expense to sale ratio
2009: 48.49%
2010: 42.09%
Current ratio
2009: 1.4:1
2010: 1.67:1
Quick Asset ratio
2009: 1.25:1
2010: 1.42:1
Debtors collection period
2009: 49 days
2010: 42 days
Creditors collection period
2009: 53 days
2010: 48 days
Stock turnover
2009: 20 times
2010: 17 times
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Okay, that's all there is to it. There can be several right answers. The whole point is to use the figures to decide whether it is a retailer or manufacturer and what kind of product it deals with. When you answer you need to make sure to include figures and explain why you think this figure tells us that the company is what you think it is. I sat down with the teacher for 20 minutes throwing at him all kinds of ideas but all that did was make him smile.
The formatting has nothing to do with the answers so underlined names are not more important or anything.
Thanks a lot to anyone who bothers reading this and writing an answer, I'll love you forever!