BUS10250 Week 13 Additional Tutorial Question

The selected financial statements' data of NGX Ltd. for the years ended 31 December 20x4 and 20x5 are as follows

NGX Ltd. Trial Balances as of 31 December

Year 20x4

Year 20x5

($m)

($m)

Cash

1,000

2,100

Trade Debtors

500

700

Closing stock

200

500

Equipment (net)

2,000

3,000

Trade Creditors

600

4,000

Long term debt

1,000

800

Capital

1,000

1,000

Sales

4,900

5,200

Cost of goods sold (COGS)

2,800

3,000

Depreciation

250

500

Salary expenses

1,250

1,400

Tax

100

50

REQUIRED:

a) Calculate (to 2 decimal places) the following ratios for the company in year 20x4 and 20x5.

i.Net profit ratiovi. Creditors ratio

ii.Gross profit ratiovii. Stock turnover ratio

iii.Current ratioviii. Gearing ratio

iv.Quick ratio

v.Debtors ratio

b) Comment on the profitability, efficiency, and short term liquidity of