Question
QUESTION THREE: The following summarized financial figures relate to North Ltd, a business operating in the clothing retail sector (Financial figures are in US$): Extracted
QUESTION THREE:
The following summarized financial figures relate to North Ltd, a business operating in the clothing retail sector (Financial figures are in US$):
Extracted Financials | 31/12/2020
| 31/12/2021 |
Sales revenues | 32,000 | 45,000 |
Profit after tax | 1,600 | 1,550 |
Total current assets | 4,400 | 5,600 |
Total current liabilities | 2,900 | 5,100 |
Inventories | 2,750 | 5,100 |
Accounts receivables | 100 | 200 |
Cash | 1,550 | 0 |
Accounts payables | 1,500 | 3,500 |
Tax due | 1,400 | 1,100 |
Overdraft (Cash) | 0 | 500 |
In year 2021, the company opened a third store. As a specialist in financial management, you are required to:
Prepare a comparative analysis of the above extracted financials as at December 31, 2020 and 2021 and comment according to your financial analysis.
To prepare the current and quick ratios.
In 2021, the CEO of North Ltd asked you to analyze the liquidity of the company according to the available information in 2020 and 2021 and prepare a short report on company's liquidity.
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