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New Member
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Nov 7, 2009, 03:09 AM
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financial ratios
ABC Co. has approached you for working capital facility. They have presented to the details of their financials as follows for the year 2008:
Sundry Creditors : 344,000; Prepaid Expenses: 29,000; Tax Dues: 48,000; Liability for Expenses: 63,000; Equipment Loan: 100,000- Term Loan: 300,000; Deposits with Banks: 100,000; FG: 394,000; Plant & Equipments: 173000; Land and Building: 674,000: Sundry Debtors: 471,000; Raw Materials: 432,000; Capital (Equity): 1,468,000; Cash:50,000;
On a further verification and discussion with them, you have come to know of the following additional details for transactions not accounted for;
The Company has supplied materials of 187,000 to its customer the value of which has been fully paid for but it is in transit on the high seas; similarly raw materials of value 234,000- purchased (on 30 days credit) from Saudi Arabian Supplier is on the high seas; Defective Raw material of 97,400- received as part of a purchase of 189,000- on 60 days credit has been returned;. A Sales Return of 72,000- (fully paid for by the Customer) has also been received but kept aside in the warehouse.
Incorporate the above information and arrive at the correct position of financials so that you will be able to compare the performance with that of the previous year (2007) for which the data is as follows:-
Liabilities Amount Assets Amount
Capital
Term Loan
Sundry Creditors
Liabilities for Expenses
1,468,000-
360,000-
275,000-
87,000- Cash
Land and Building
Plant and Equipment
Sundry Debtors
Prepaid Expenses
Raw Materials
Finished Goods
Deposits 8,000-
595,000-
170,000-
452,000-
43,000-
417,000-
333,000-
172,000-
2,190,000- 2,190,000-
…2
-2-
INCOME STATEMENT
2008 2007
Sales 3,480,000- 2,610,000-
COGS 2,436,000- 1,957,500-
Gross Profit 1,044,000- 652,500-
Selling & Administrative Exp 626,400- 391,500-
Net Profit 417,600- 261,000-
What will values be for
1) Quick Ratio
2) Debt-Equity Ratio
3) Inventory Turnover Ratio
4) Collection Period
5) Payment Period
6) Working Capital Required
7) Gross Working Capital
8) Net Working Capital
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