Let us assume that XYZ Ltd undertook the following transactions in March 2016. (18 marks)

2016		Transactions
January	1	Balances brought forward: Cash GH230; Bank GH 4756

	2	The following paid their accounts by cheque, in each case deducting 5 per cent cash discounts: R Boateng GH140; E Takyi GH220; R Henaku GH300 (all amounts are pre-discount).
	4	Paid rent by cheque GH120
	6	J Quarshie lent XYZ Ltd GH1000 paying cheque
	8	XYZ Ltd paid the following accounts by cheque in each case deducting a 2per cent cash discount: N Badu GH360; P Tawiah GH480; C Hinson GH800 (all amounts are pre-discount).
	10	XYZ Ltd paid motor expenses in cash GH44
	12	H Hammond pays his account of GH77, by cheque GH74, deducting GH3 cash discount
	15	XYZ Ltd paid wages in cash GH160
	18	The following paid their accounts by cheque, in each case deducting 5 per cent cash discount: C Awuakye GH260; Winner Ltd GH340; H Manu GH460 (all amounts are pre-discount)
	21	Cash withdrawn from the bank GH350 for business use
	24	Cash drawings GH120
	25	XYZ Ltd paid T Sowah his account of GH140, by cash GH133, having deducted GH7 cash discount
	29	Bought fixtures paying by cheque GH650
	31	Received commission by cheque GH 88

Required:

1. Prepare a three-column cash book for XYZ Ltd, balancing it on January 31, 2016. (18 marks)
2. Outline two (2) tools for financial statement analysis. (2 marks)

5)

The following is an extract of financial records of ABC ltd as at 31 December 2017.

2017 2016

GHS GHS

Sales 34,000 28,000

Gross profit 23,000 18,500

Net profit 8,000 7,500

Inventory 3,900 3,600

Current asset 7,200 5,500

Current liabilities 6,900 6,000

Net assets 22,000 19,000

Required

Compute and interpret the following ratios for the company: (16 marks)

1. Gross profit margin
2. net profit margin
3. asset utilization ratio
4. current ratio
5. quick ratio
6. Mention four weakness of ratio analysis. (4 marks)