The following statement of financial position was prepared for the business owned by Roy Coulins at the end at its financial year. The business had credit sales of $72,000 and credit purchases of $429,000 for the year ended 30 June 2014.

Calculate the following ratios: 

a. Current ratio 

b. Liquid (acid test) ratio 

c. Return on capital employed 

d. Trade receivables turnover 

e. Trade payables turnover. 

In each case, state the formula used.

Transcribed Image Text:

2$ $ Cost Depreciation Net book value Nan-current 860 000 215 000 645 000 assets Current assets Inventory 54 000 Trade receivables 8 000 Other 2 000 receivables Cash and cash 8 000 72 000 equivalents Total assets 717 000 Capital Opening balance 661 000 Profit for the year 75 000 736 000 Drawings 59 000 677 000 Current liabilities Trade payables 39 000 Other payables 1 000 40 000 717 000 Total capital and liabilities