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1. Case Analysis: Al Ismail Fashions (AIF) is a garment company, located in Alkhwair Muscat, which consists primarily of much smaller garment makers. AIF was

1. Case Analysis:

Al Ismail Fashions (AIF) is a garment company, located in Alkhwair Muscat, which consists primarily of much smaller garment makers. AIF was started 13 years ago by Ahmed and Salim, who has over 15 years of experience with a major garment manufacturer. And the partnership initially blended very well. Ahmed is extremely creative with a real talent for merchandising. Mainly as a result of his knowledge, the AIF is known for its quality and in fashions. Salim has contributed to merchandising and marketing ideas, but has mainly assumed the duties of the firms chief operating officer. Ahmed has had little interest in the financial aspects of the company as he preferred to work on fashion designing and development of marketing strategies. A few months ago, however, he decided that he had better become more involved with the companys financials. Ahmed want to analyse the financial statement of the company to know the current financial performance and positions of the company. The following are the financial details of the AIF.

Liabilities

OMR

Assets

OMR

Equity share capital

27,800

Furniture

4,000

Accounts Payable

1,550

Cash in hand

4,500

Reserves and surplus

2,550

Bills receivables

3,750

Bills payable

950

Land

9,000

Long term borrowings

6,520

Marketable securities

850

Outstanding Salaries

850

Cash in bank

5,250

Loan from Bank

3,450

Building

6,600

Preference share capital

5,265

Prepaid expenses

850

Bank overdraft

825

Cars & Trucks

3,350

Tax outstanding

590

Account Receivables

1,150

Inventory

2,150

Income earned but not received

430

Machinery

6,250

Equipment

2,220

Total

50,350

Total

50,350

Other information

Particulars

OMR

Sales

330,000

Cost of goods sold

155,000

Administration expenses

33,000

Selling & Distribution exp.

44,000

Interest received

12,200

Rent Received

2,000

Commission received

1,750


As a Finance Manager of the company you are required to:

Requirement : 1

Calculate the following from the Balance Sheet:

Marks

A

Total fixed assets

0.5

B

Total long term liabilities

0.5

C

Total current assets

0.5

D

Total current liabilities

0.5

E

Shareholders funds

0.5

F

Capital employed

0.5

Requirement : 2

Calculate the following from the additional information given

Marks

G

Gross profit

0.5

H

Net profit

0.5

Requirement : 3

Calculate the following ratios:

Marks

I

Return on capital employed

1.0

J

Current ratio

1.0

K

Liquid ratio

1.0

L

Return on Equity

1.0

M

Gross Profit & Net Profit Margin

1.0

N

Give a brief report on the financial position of the company based on the above figures.

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