12.9 The following information relates to Style Limited for the two years to 30 June 2005 and 2006 respectively:

Required:

(a) Calculate the following accounting ratios for the two years 2005 and 2006 respectively:
1 gross profit;
2 mark-up;
3 net profit;
4 return on capital employed;
5 stock turnover;
6 current ratio;
7 acid test;
8 trade debtor collection period; and 9 trade creditor payment period.

(b) Comment upon the company’s performance for the year to 30 June 2006.

Transcribed Image Text:

Trading and profit and loss accounts for the years 2005 2006 000 000 000 000 Sales (all credit) 1500 1900 Less: Cost of goods sold: Opening stock 80 100 Purchases (all on credit terms) 995 1400 1075 1500 100 975 200 1300 Gross profit Less: Expenses 525 600 250 350 Net profit 275 250