Question
Ratio Analysis b) The following information is provided for Mvita Ltd Ratio Analysis 2009 2010 Cost Deprec. Net Book Value Cost Deprec. Net Book Value
Ratio Analysis
b) The following information is provided for Mvita Ltd
Ratio Analysis |
| 2009 | 2010 | |||
Cost | Deprec. | Net Book Value | Cost | Deprec. | Net Book Value | |
Sh.000 | Sh.000 | Sh.000 | Sh.000 | Sh.000 | Sh.000 | |
Plant Building Investments at Cost Land Stock Debtors Bank Ordinary shares at Sh.20 each Share premium Revaluation Reserve Profit and Loss Account 10% Debentures Creditors Proposed Dividends Bank Profit & Loss Account Sales Cost of Sales Expenses Dividends Balance b/f Balance c/f | 200 1,000 | 80 200 | 120 800 920 1,000 860 1,100 800 __60 4,740 800 240 500 2,000 800 400 ____ 4,740 4,000 2,000 2,000 1,200 800 400 400 100 500 | 220 1,800 | 100 220 | 120 1,580 1,700 1,600 1,260 1,300 1,000 ___- 6,860 1,000 280 400 500 3,000 1,200 400 __80 6,860 4,000 2,400 1,600 1,200 400 400 - 500 500 |
Required:
Calculate for Mvita Ltd. for 2009 and 2010 the following ratios:
- Return on capital employed;
- Debtors turnover;
- Creditors turnover;
- Current ratio;
- Quick assets (acid test) ratio;
- Gross profit ratio
- Net profit percentage
- Dividend cover
- Gearing ratio.
Using the summarized accounts given and ratios you have just prepared, comment on the financial position and prospects of Mvita Ltd. (14 marks)
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