Financial Reporting Question

QUESTION 2 You are a consultant for Glory Lad, a quoted company operating in the manufacturing sector. Following are a Statement of Profit or Lows and Statement of Financial in with comparatives for the year ended 31" December 2018 Statement of Profit or Loss for the year ended 31 December 2018 GHS GIS Sales revenue 3,095.576 1.909.051 Cost of sales 2.402.609 1.441.950 Gross profit 457.100 Interest receivable Administration expenses 38366 23272 Operating profile 360 345 347011 Interest 18.115 21.509 Profit before taxation 3421.30 225.103 3172 Profit for the year 267.90 19 Statement of Financial Position as at 31 December 2015 GHS 802.180 656.071 Non-current assets Property, plant and equipment Current assets Inventory Trade receivables Prepayment and accrued income Cash at bank and in hand 905.679 807312 1068,450 100 154 1.870 610 1664.es 25.178 410 501 651.21 Total Equity and liabilities Equity Ordinary shares Income surplus New-current liabilities 10% loan stock Current liabilities Trade payables Accruals and deferred income Corporate taxes Other taxes 100.000 627,018 58.340 37.300 Total equity and liabilities 860,731 1.870,630 1.661.25 Required: a. Calculate the following ratios i Profitability ratios - Retum on Capital Employed. Return on Equity, Gross profit margin and Net profit margin Long term solvency and stability-Debe Asset tie, Gearing ratio and Interest cover Short-term solvency and liquidity - Current ratio and Acid test ratio I. Efficiency (tumover ratios) - Account receivable collection period, Account payable payment period, Inventory turnover times) (6 marks) Prepare a report addressed to the Chief Executive Officer, assessing the relative performance and financial position of Gloyd for the year ended 31 December, 2015 (14 marks) (Total 20 marks)