Kamau and Sons Ltd present you the following Liabilities Equity Share Capital 8% Preference Share Capital...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Kamau and Sons Ltd present you the following Liabilities Equity Share Capital 8% Preference Share Capital Reserves Fund 6% Debentures Sundry Creditors Profit and Loss a/c BALANCE SHEET (as on 31st December, 2010). 2009 1,000 2010 20,000 Amount Assets 50,000 Fixed Assets 10,000 Bills Receivable 40,000 Stock 20,000 Sundry Debtor 30,000 Bank Balance 21,000 171,000 Preliminary Expenses Amount 87,500 25,000 30,000 13,500 7,000 8,000 171,000 The directors intend to transfer a sum of Shs. 5,000 out of the current year profit to provision for tax. You are required to calculate the following ratios and give your brief comments: i) Return on capital employed ratio. ii) Current ratio iii) Fixed assets to net worth iv) Debt to equity capital v) Return on owner's capital (2 marks) (2 marks) (2 marks) (2 marks) (2 marks) Kamau and Sons Ltd present you the following Liabilities Equity Share Capital 8% Preference Share Capital Reserves Fund 6% Debentures Sundry Creditors Profit and Loss a/c BALANCE SHEET (as on 31st December, 2010). 2009 1,000 2010 20,000 Amount Assets 50,000 Fixed Assets 10,000 Bills Receivable 40,000 Stock 20,000 Sundry Debtor 30,000 Bank Balance 21,000 171,000 Preliminary Expenses Amount 87,500 25,000 30,000 13,500 7,000 8,000 171,000 The directors intend to transfer a sum of Shs. 5,000 out of the current year profit to provision for tax. You are required to calculate the following ratios and give your brief comments: i) Return on capital employed ratio. ii) Current ratio iii) Fixed assets to net worth iv) Debt to equity capital v) Return on owner's capital (2 marks) (2 marks) (2 marks) (2 marks) (2 marks)
Expert Answer:
Answer rating: 100% (QA)
The detailed answer for the above question is provided below Answer i Return on capital employed rat... View the full answer
Related Book For
Financial Accounting for Decision Makers
ISBN: 978-0273763451
6th Edition
Authors: Peter Atrill, Eddie McLaney
Posted Date:
Students also viewed these finance questions
-
You are provided with the followings: Balance Sheet as on 31st March, 2017 Assets Liabilities Capital Fund Subscription received in Advance Outstanding Expenses Loan Sundry Creditors Total Receipts...
-
The Balance Sheets of a firm as on 31st December 2008 and 2009 are given below: 2008 2009 Assets 1,00,000 1,60,000 Fixed Assets - Cost Inventory Debtors Liabilities Share Capital Retained Earnings...
-
Calculate the 2010 current and quick ratios based on the projected balance sheet and income statement data. What can you say about the companys liquidity position in 2008, 2009, and as projected for...
-
Let B > 0. Show that the maximum of subject to the constraints x + this to conclude that f(x,...,xn) = X1 X2 Xn for all positive numbers a,..., an. . + xn = B and xj 0 for j = 1,. n occurs for x =...
-
What is the maximum kinetic energy of an electron emitted in the decay of a free neutron?
-
FIGURE EX31.1 shows the electric and magnetic field in frame A. A rocket in frame B travels parallel to one of the axes of the A coordinate system. Along which axis must the rocket travel, and in...
-
Lakia Corporation reported the following current-year purchases and sales data for its only product: Lakia uses a perpetual inventory system. Ending inventory consists of 500 units, 400 from the July...
-
Jasmines Snack Shop sells two brands of potato chips. She produces them by buying them from a wholesale supplier. Brand X costs Jasmine $1 per bag, and Brand Y costs her $1.40. Draw Jasmines...
-
Quary Company is considering an investment in machinery with the following information. The company's required rate of return is 12%. (PV of $1. FV of $1. PVA of $1, and FVA of $1) (Use appropriate...
-
What Happens When You Dont Deliver on Your Promises Web: www.clearly.ca Facebook: Clearly Canadian If a new product or service seems like the perfect option to solve a problem or capitalize on an...
-
You must select any one listed company. Go to the Karachi Stock Exchange website and select the company of your choice. Once the company is selected, you can download the annual reports of the...
-
What are some of the initial impacts of international activity on organization design?
-
What is the global functional design? What are its strengths and weaknesses?
-
What is the global area design? What are its strengths and weaknesses?
-
What factors could conceivably cause a sharp decline in the number of new strategic alliances formed?
-
What are the four basic steps in establishing an international control system?
-
The following is a December 31, 2024, post-closing trial balance for Almway Corporation. Account Title Cash Investment in equity securities Accounts receivable Inventory Prepaid insurance (for the...
-
Prove that if Σ an is absolutely convergent, then a. an
-
You have heard the following statements made. Comment critically on them. (a) Equity only increases or decreases as a result of the owners putting more cash into the business or taking some out. (b)...
-
(a) Calculate the Z-scores for Ali plc and Bhaskar plc (see SAQ 7.1 on pages 250 251), using the Altman model set out on page 280. (b) Comment on the Z-scores for the two businesses and the validity...
-
Identify the main ways in which a large listed company may communicate with its shareholders.
-
What is the cost of net debt of a company that has no more shareholders equity equal to? And the cost of capital?
-
Is the cost of capital an accounting or financial concept?
-
What are we forgetting when we say that by increasing return on equity, the leverage effect of debt cannot increase value?
Study smarter with the SolutionInn App