The summarized accounts of Hope (Eternal Springs) Ltd for the years 2015 and 2016 are given below.

Question:

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Inventory at 1 January 2015 was £50,000.

Required:

(a) Calculate the following ratios for 2015 and 2016:
(1) Gross profit: Sales (2) Inventory turnover (3) Net profit: Sales (4) Quick ('acid test')
(5) Working capital (6) Net profit: Capital employed

(b) State the possible reasons for and significance of any changes in the ratios shown by your calculations

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Frank Woods Business Accounting Volume 1

ISBN: 9781292084664

13th Edition

Authors: Alan Sangster, Frank Wood

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Question Posted: Mar 29, 2024 01:01 AM

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The summarized accounts of Hope (Eternal Springs) Ltd for the years 2015 and 2016 are given below.

Question:

Statements of Profit or loss for the years ending 31 December 2015 000 000 Sales Less Cost of sales Gross profit Less Administration expenses Loan note interest Net profit 38 200 (150) 50 (38) 12 2016 000 000 280 46 (210) 70 4 4 (50)

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Frank Woods Business Accounting Volume 1

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