Question
Please help me i will give good rating i) Current ratio (example) ii) Return on assets iii) Return on capital employed iv) Inventory turnover Show
Please help me i will give good rating
i) Current ratio (example)
ii) Return on assets
iii) Return on capital employed
iv) Inventory turnover
Show the answer of the above transactions based on the accounting equation in the form of Tabular table as shown below.
Ratio | Purpose | Formula | 2022 | 2021 | Satisfactory level | Explanation |
Current Ratio | To show short term debt paying ability | Current Assets Current Liabilities | 64899 / 17,201 = 3.77 | 44,996 / 31,173 = 1.44 | 1.5 is considered as the norm and acceptable. | In 2022, For every RM1 of the current liabilities, there is RM3.77 of current assets to cover it. In 2022 the firm is able to cover short term debts. |
Lew Berhad Comparative Statements of Financial Position as at 31 December 2022 and 2021 Lew Berhad Comparative Statements of Financial Position as at 31 December 2022 and 2021
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