Financial ratios quantify many aspects of a business and are an integral part of financial statement analysis. Financial ratios are categorized according to financial aspects of the business for which the ratio measures. Based on the bellow table that is financial information of Pizo Co. for year 2016 and 2017

(a) Describe Acid Test Ratio, Account Payable Turnover, Net Working Capital, Debt Ratio, Inventory Turnover and their measurements.

(10 marks)

(b) Calculate the Acid Test Ratio, Account Payable Turnover, Net Working Capital, Debt Ratio, Inventory Turnover for year 2017.

(10 marks)

Pizo Co. Financial Information (Extract) 2016 2017 USD000 USD000 Current Assets Cash & Cash Equivalent 250,000 185,000 Account Receivable 120,000 234,000 Inventory 56,000 68,000 Non-current assets Plant, Properties and Equipment 380,000 235,000 Long-term investment 120,000 90,000 Total Assets 926,000 812,000 Current Liabilities Trade payables and accruals 56,000 43,000 Other Payable and accrual 95,000 32,000 Contract Liabilities 23,000 15,600 Non-current liabilities Provision 3,000 2,500 Borrowing 200,000 450,000 Total Liabilities 377,000 543,100 Total Equity 128,500 335,000 Revenue 550,000 450,000 Cost of Sales 232,000 256,000 Earnings before interest and 2,500 1,820 tax Basic EPS 0.123 0.125