Question 2

The selected financial statements data of NGX Ltd. for the years ended 31 December 20x4 and 20x5 are as follows

NGX Ltd. Trial Balances as of 31 December
		Year 20x4		Year 20x5
		($m)		($m)
Cash		1,000		2,100
Trade Debtors		500		700
Closing stock		200		500
Equipment (net)		2,000		3,000
Trade Creditors		600		4,000
Long term debt		1,000		800
Capital		1,000		1,000
Sales		4,900		5,200
Cost of goods sold (COGS)		2,800		3,000
Depreciation		250		500
Salary expenses		1,250		1,400
Tax		100		50

REQUIRED:

a) Calculate (to 2 decimal places) the following ratios for the company in year 20x4 and 20x5.

i. Net profit ratio vi. Creditors ratio

ii. Gross profit ratio vii. Stock turnover ratio

iii. Current ratio viii. Gearing ratio

iv. Quick ratio

v. Debtors ratio

b) Comment on the profitability, efficiency, and short term liquidity of NGX Ltd.