Self-test Consider the following figures for Gleaston plc:

Profit and loss account for the year ended 30 September 2009

£000 Sales 28,980 Less: cost of sales (15,295)

Gross profit 13,685 Less: expenses (3,785)

Net profit 9,900 Balance sheet at 30 September 2009

£000 £000 Fixed assets 49,910 Current assets:

– stock 13,860

– debtors 8,030

– bank 1,080 22,970 Current liabilities:

– creditors (4,650)

– accruals (6,960)

Net current assets 11,360 61,270 Financed by:

Ordinary share capital 46,400 Profit and loss 14,870 61,270 Notes:

1. All purchases and sales are on credit.

2. Credit purchases for the year were £12,608,000.

Required:

Calculate the following ratios for Gleaston plc:

(i) Gross profit

(ii) Net profit

(iii) Current ratio

(iv) Acid test (liquidity)

(v) Debtors’ collection period (in days)

(vi) Creditors’ payment period (in days)

(ABE Introduction to Accounting, December 2009)