BUS10250 Financial Accounting Semester B 2019-2020 Take Home Assignment The following are the financial statements of E Ltd for the years ended 31 March 20x2 and 20x3. Balance sheets as at 31 December 315 20x3 20x2 $'000 $'000 $'000 $'000 Non current assets, at net book value 280 Current assets Stock 290 240 Debtors 140 120 Bank 55 0 485 360 360 Total assets 765 675 Equity Share capital 100 100 Reserves 315 85 415 185 Long term liabilities 8% Debentures (issued in 20x0) 240 240 Current liabilities Creditors 110 Bank overdraft 100 0 150 150 110 250 110 250 Total equity and liabilities 765 675 Income statements for the years ended 31 March 20x3 20x2 $'000 $'000 $'000 $'000 Sales 1,700 1,500 Opening stock 240 200 Purchases 1.150 1.090 1,390 1,290 Less: Closing stock 290 Cost of sales 1.100 1.050 Gross profit 600 450 Less: Operating and finance costs 270 Net profit 260 180 Taxation 20 Net profit after taxation 230 160 240 1.050 340 30 REQUIRED: (a) Calculate to one decimal place the following ratios for E Limited for both vears 20x2 and 20x3. Show workings. (64 marks) (1) Acid test ratio; (ii) Current ratio; Creditors' repayment period (in days); (iv) Debtors' collection period (in days); Gearing ratio; (vi) Gross profit to sales percentage; (vii) Net profit (before interest and taxation) to sales percentage; and (vi) Return on capital employed (b) Comment on the performance of E Limited over the two year period using the ratios calculated in (a) in terms of: (36 marks) Liquidity (1) Long term solvency/risk G) Profitability