Question
Required : Write a report to your board of directors analyzing thperformance of Cheviot Plc, comparing the results against the previous year and against the
Required:
Write a report to your board of directors analyzing thperformance of Cheviot Plc, comparing the results against the previous year and against the industry ave
The following are extracts from the financial statements of Cheviot Plc.
Income Statement, for the year ended 30th April 2019
2019 2018
Sales $11,200 $9,750
Cost of sales 8,460 6,825
Gross profit 2,740 2,925
Expenses:
Depreciation 560 527
Interest Expense 195 360
Rent expense 1,290 1,400
Income Tax expense 150 268
Net Income 545 370
Comparative Balance Sheet, as at 30th April 2019
2019 2018
Assets
Current Assets
Cash 80 120
A/C Receivables 1230 1080
Inventory 640 490
PPE
Equipment 1850 1430
Total Assets 3800 3120
Liabil ities:
A/C payable 750 690
Interest payable 110 80
Taxes payable 95 75
Total liabilities 955 845
Equity:
Commons shares 800 800
Long-term Bonds 800 600
Retained Earnings 1245 875
Total Liabilities and Equity 3800 3120
The following ratios are those calculated for Cheviot Plc, based on its published accounts for the previous year, and also the latest industry average ratios:
Cheviot Industry average
30th April 2018
Current Ratio 2.00 1.90
Quick Assets ratio 1.42 1.27
Inventory turnover (times) 13.90 18.30
Days sales uncollected 40 days 52 days
Accounts Payable payment period 37 days 49 days
Profit margin 3.79 3.80
Gross profit ratio 30.00 35.00
Return on Total Assets 11.85 12.00
Required:
Write a report to your board of directors analyzing thperformance of Cheviot Plc, comparing the results against the previous year and against the industry ave
The following are extracts from the financial statements of Cheviot Plc.
Income Statement, for the year ended 30th April 2019
2019 2018
Sales $11,200 $9,750
Cost of sales 8,460 6,825
Gross profit 2,740 2,925
Expenses:
Depreciation 560 527
Interest Expense 195 360
Rent expense 1,290 1,400
Income Tax expense 150 268
Net Income 545 370
Comparative Balance Sheet, as at 30th April 2019
2019 2018
Assets
Current Assets
Cash 80 120
A/C Receivables 1230 1080
Inventory 640 490
PPE
Equipment 1850 1430
Total Assets 3800 3120
Liabil ities:
A/C payable 750 690
Interest payable 110 80
Taxes payable 95 75
Total liabilities 955 845
Equity:
Commons shares 800 800
Long-term Bonds 800 600
Retained Earnings 1245 875
Total Liabilities and Equity 3800 3120
The following ratios are those calculated for Cheviot Plc, based on its published accounts for the previous year, and also the latest industry average ratios:
Cheviot Industry average
30th April 2018
Current Ratio 2.00 1.90
Quick Assets ratio 1.42 1.27
Inventory turnover (times) 13.90 18.30
Days sales uncollected 40 days 52 days
Accounts Payable payment period 37 days 49 days
Profit margin 3.79 3.80
Gross profit ratio 30.00 35.00
Return on Total Assets 11.85 12.00
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The Impact Of Globalization On International Finance And Accounting
Authors: David Procházka
1st Edition
3319687611, 9783319687612
