The summarized balance sheets of company R at the end of two consecutive financial years were as shown below, in Figure 7.9.

Sales were i541,000 and i675,000 for the years ended 31 March 20X1 and 20X2, respectively. Corresponding figures for cost of sales were i369,000 and i481,000, respectively. At 31 March 20X0, reserves had totalled i21,000. Ordinary share capital was the same throughout.
Calculate the following ratios for both years and comment briefly on the results:
(i) Gross profitSales;
(ii) Net profitSales;
(iii) SalesNet assets;
(iv) Net profitNet assets;
(v) Current assetsCurrent liabilities;
(vi) Quick assetsCurrent liabilities.

Transcribed Image Text:

Figure 7.9 R's summarized balance sheets as at 31 March (000) 20X1 50 115 42 Fixed assets (at written-down values) Premises Plant and equipment Vehicles 207 Current assets 20X2 48 196 81 325 86 49 Inventory Debtors and prepayments 53 Bank and cash 188 177 62 30 269 Current liabilities 2222 72 20 Creditors and accruals 132 Proposed dividends 30 92 162 96 Working capital 107 303 Net assets 432 Financed by 250 553 Ordinary share capital 250 Reserves 82 303 Shareholders' funds 332 - Loan capital: 7 per cent debentures 100 303 432