Question
Question 2 Ratio Analysis 30 marks Calculate and analyse the following ratios and percentages for Frames Ltd: Current ratio Acid Test Total Debt to Total
Question 2 Ratio Analysis 30 marks
- Calculate and analyse the following ratios and percentages for Frames Ltd:
- Current ratio
- Acid Test
- Total Debt to Total Assets ratio
- Return on Total Assets percentage
- Net Profit percentage
- Equity ratio
- Gross Profit percentage
- Total Expenses percentage
- Inventory Turnover
10. Accounts Receivable Turnover
The following information for the year ended 31 March 2021, has been taken from the accounts of Frames Ltd., an aluminum glass frame business in Takapuna, Auckland.
Revenue and Expenses | 31 March 2021 $ |
Net Sales | 120,000 |
Cost of Sales | 65,000 |
Expenses | 10,500 |
Net Profit before income tax | 44,500 |
Income Tax Expense (28%) | 12,460 |
Net Profit after tax | 32,040 |
Assets, Liabilities and Equity |
|
Cash at Bank | 50,000 |
Accounts Receivable | 20,000 |
Inventory | 50,000 |
Land and Buildings | 350,000 |
Plant and Machinery | 120,000 |
Loan from Bank of New Zealand | 100,000 |
Delivery Vehicle | 60,000 |
Accounts Payable | 40,000 |
Shareholders Equity including the Net Profit $32,040 | 810,000 |
Additional Information:
Inventory for the year ended 31 March 2020 = $40,000
Accounts Receivable for the year ended 31 March 2020 = $ 32,000.
10 x 3 marks each; total 30 marks
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started