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Please provide your answer through calculations to the problem, by presenting the formulas you use, the calculations, the result and its interpretation. Analyse if the
Please provide your answer through calculations to the problem, by presenting the formulas you use, the calculations, the result and its interpretation. Analyse if the following firm exhibits or not overtrading by interpreting the five sets of ratios and the signals. Consider the Overdraft limit is $150m. Calculate Current ration, Quick ratio, Account receivables and account payable days, Inventory days and Sales to Working capital. now last year Amounts are in $m 2010 2018 Sales Revenue 6000 2550 Cost of Sales (COGS) 5824 2403 Gross Profit 176 147 Net profit 150 140 Current assets Inventories 500 Account receivables (note 1) 498 201 342 Account receivables (note1) Short term investment Cash at bank and in hand Accounts payable (failing due within 1 year) Loans and overdrafts 1 Corporation taxes Dividend Accounts payable (note2) Net current assets Notes: 498 5 50 1053 140 21.12 22 820.5 1003.62 49.38 342 52 600 80 17.64 21 432.8 551.44 48.56 Notes: 1. Trade account receivables 2. Trade account payable 490 815 205 300
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