Question 1 - Learning Goal #2 (06 degrees):

Let the budget and list of profits and losses for Al Rajhi company for 2018:

Budget (values in 1,000 riyals)

Assets

Amounts

Liabilities and property rights

Amounts

Critique

90

Payment papers

290

City accounts

394

Credit accounts

94

Stock

696

Taxes due

16

Securities

15

Other current liabilities

100

Total current assets

1195

Total current liabilities

500

Total fixed assets

1030

Long-term loans

530

Minus: Accumulated wear and tear

(329)

Total liabilities

1030

fixed assets net

701

Paid-up capital

929

Long-term investments

50

Withheld profits

210

Other long-term assets

223

Total property rights

1139

Assets	Amounts	Liabilities and property rights	Amounts
Reviews	90	Payment papers	290
City accounts	394	Credit accounts	94
Stock	696	Taxes due	16
Securities	15	Other current liabilities	100
Total current assets	1195	Total current liabilities	500
Total fixed assets	1030	Long-term loans	530
Minus: Accumulated wear and tear	(329)	Total liabilities	1030
Net fixed assets	701	Paid-up capital	929
Long-term investments	50	Withheld profits	210
Other long-term assets	223	Total property rights	1139
Total assets	2169	Total liabilities and property rights	2169

Profit and loss account (values in 1,000 riyals)

Statement	Amounts
Net sales (all forwards)	2211
Cost of goods sold	(1599)
Gross profit	612
Operating expenses	(402)
Operating profit	210
Interest expense	(59)
Pre-tax profit	151
Tax	60
Net profit after tax	91

Required:

Calculate the following: current and rapid ratio, turnover rate of receivables and fixed assets, profit margin ratio, rate of return on equity, and rate of return on assets.

Commented briefly on the company's ratios in the light of the following industry ratios: current ratio 2.15, fast ratio 1.25, turnover rate of accounts receivable (collection period) 65 days, turnover rate of fixed assets 2.7, profit margin ratio 8.2%, return on assets 9.8%, and return on equity 15%.