11.1 The chief executive officer of Sparkrite Ltd, a trading business, has just received summary sets of

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11.1 The chief executive officer of Sparkrite Ltd, a trading business, has just received summary sets of financial statements for last year and this year:

image text in transcribedimage text in transcribedThe chief financial officer has expressed concern at the increase in inventories and trade receivables levels.
Required:

(a) Show, by using the data given, how you would calculate ratios that could be used to measure inventories and trade receivables levels during last year and this year.

(b) Discuss the ways in which the management of Sparkrite Ltd could exercise control over the levels of (i) inventories; and (ii) trade receivables.

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Related Book For  book-img-for-question

Management Accounting For Decision Makers

ISBN: 9781292072432

8th Edition

Authors: Dr Peter Atrill, Eddie McLaney

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