Question
Ahmed Company Ltd. is a wholesaler of electrical parts in Sharqiyah region. The following information is furnished by company in order to assess its performance
Ahmed Company Ltd. is a wholesaler of electrical parts in Sharqiyah region. The following information is furnished by company in order to assess its performance by using different ratios for the year 2019: - Company started its business with a share capital and debts of RO 2,000,000 consisting of 160,000 shares of RO 10 each and bank loans RO 400,000. Companys assets including building worth RO 900,000, machinery worth RO 135,000, cash available in the office RO 42,500 and at bank 135,500. At the end of 2019, the inventory reported worth RO 134,750. Later in the year company purchased furniture worth of RO 20,450. In the year 2019, company has made the sale of RO 1,350,400 by incurring cost of goods sold RO 690,250 and operating expenses RO 320,500. The income from other sources reported RO 15,800. Company paid interest of RO 8,400 on bank loans in the year 2019. The total outstanding expenses and accounts payable reported RO 4,400 and RO 124,500 at the end of the year 2019.
Company also paid taxes at 15% on net profit. The dividend declared and paid 9.5% on PAT.
The market value of the shares at the end of the year RO 13.250 each.
Requirements:
- Calculate the following ratios:-
a. Shareholders Ratios by showing all required calculations and formulas.
b. Profitability Ratios by showing all required calculations and formulas.
c. Current and Quick Ratio by showing all required calculations and formulas.
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