Part 4: UNDERSTANDING THE FINANCIAL STATEMENTS OF BUSINESS CUSTOMERS (10 MARKS)

You are provided with the following financial ratios of Rob Unlimited:

Return on assets: Income before interest and tax/total assets x 100/1 = 61.666666%

Gross profit ratio: Gross profit/Principal revenue x 100/1 = 30%

Operating margin Operating income/principal revenue x 100/1 = 12.333333%

Net income margin: Net income before taxation/ Principal revenue x 100/1 = 10.666667%

Turnover ratio of fixed assets: Principal revenue / fixed assets = 15 times

Turnover ratio of current assets: principal revenue/ current assets = 7.5 times

Current ratio: current assets/current liabilities = 3:1

Asked: Use the information from the ratios to complete the statement of financial position and statement of comprehensive income for Rob Unlimited.

Statement of financial position as at 28 February 20xx

Shareholder Interest

Ordinary share capital $500,000

General reserves $_______

Non-current liabilities

Long term loan $600,000

Current liabilities

Trade creditors $200,000

Other Short term loans $_______

Total $______

Non-current assets

Vehicles and equipment $______

Current assets

cash $150000

Debtors $_______

stock $600000

Total $________

Statement of comprehensive income for the year ended 28 February 20xx

Principle revenue $9000000

Inventory beginning of year $900000

Plus purchase $______

Less Inventory end of year $600000

Cost of goods sold $6300000

Gross income $_______

Operating expenses $_______

Depreciation $90000

Net income before interest and taxation $1110000

Interest payments $_______

Net income before taxation $_______