Return on equity (ROE) is measured by Profit Average total equity Assume ROE is less than 100 and that the cash balance remains positive State the effect the following event occurring on the reporting date would have on this ratio EVENT The credit purchase of inventory Asset turnover (ATO) is measured by Revenue Average total assets Assume ATO is currently 1 5 times p a and that the cash balance remains positive State the effect the following event occurring on the reporting date would have on this ratio EVENT The credit purchase of inventory The Quick ratio is measured by (Cash Receivables) Current liabilities Assume this ratio is currently 80 (or 0 8 1 ) and that the cash balance remains positive at all times State the effect the following event occurring on the reporting date would have on this ratio EVENT The repayment of principal on an interest only loan The Interest coverage ratio is measured by Earnings before interest and tax Finance costs State the effect the following event occurring on the reporting date would have on this ratio EVENT Recognising a gain from the cash sale of a non current asset Cash flow per share is measured by Net operating cash flow Weighted average number of shares on issue State the effect the following event occurring on the reporting date would have on this ratio EVENT The repayment of principal on an interest only loan Return on equity (ROE) is measured by Profit Average total equity Assume ROE is less than 100 and that the cash balance remains positive State the effect the following event occurring on the reporting date would have on this ratio EVENT The credit purchase of inventory Asset turnover (ATO) is measured by Revenue Average total assets Assume ATO is currently 1 5 times p a and that the cash balance remains positive State the effect the following event occurring on the reporting date would have on this ratio EVENT The credit purchase of inventory The Quick ratio is measured by (Cash Receivables) Current liabilities Assume this ratio is currently 80 (or 0 8 1 ) and that the cash balance remains positive at all times State the effect the following event occurring on the reporting date would have on this ratio EVENT The repayment of principal on an interest only loan The Interest coverage ratio is measured by Earnings before interest and tax Finance costs State the effect the following event occurring on the reporting date would have on this ratio EVENT Recognising a gain from the cash sale of a non current asset Cash flow per share is measured by Net operating cash flow Weighted average number of shares on issue State the effect the following event occurring on the reporting date would have on this ratio EVENT The repayment of principal on an interest only loan

Question

Return on equity (ROE) is measured by Profit   Average total equity Assume ROE is less than 100  and that the cash balance remains positive  State the effect the following event occurring on the reporting date would have on this ratio  EVENT  The credit purchase of inventory Asset turnover (ATO) is measured by Revenue   Average total assets  Assume ATO is currently 1 5 times p a  and that the cash balance remains positive  State the effect the following event occurring on the reporting date would have on this ratio  EVENT  The credit purchase of inventory The Quick ratio is measured by (Cash   Receivables)   Current liabilities  Assume this ratio is currently 80  (or 0 8 1 ) and that the cash balance remains positive at all times  State the effect the following event occurring on the reporting date would have on this ratio  EVENT  The repayment of principal on an interest only loan The Interest coverage ratio is measured by Earnings before interest and tax   Finance costs  State the effect the following event occurring on the reporting date would have on this ratio  EVENT  Recognising a gain from the cash sale of a non current asset Cash flow per share is measured by Net operating cash flow   Weighted average number of shares on issue  State the effect the following event occurring on the reporting date would have on this ratio  EVENT  The repayment of principal on an interest only loan Return on equity (ROE) is measured by Profit   Average total equity Assume ROE is less than 100  and that the cash balance remains positive  State the effect the following event occurring on the reporting date would have on this ratio  EVENT  The credit purchase of inventory Asset turnover (ATO) is measured by Revenue   Average total assets  Assume ATO is currently 1 5 times p a  and that the cash balance remains positive  State the effect the following event occurring on the reporting date would have on this ratio  EVENT  The credit purchase of inventory The Quick ratio is measured by (Cash   Receivables)   Current liabilities  Assume this ratio is currently 80  (or 0 8 1 ) and that the cash balance remains positive at all times  State the effect the following event occurring on the reporting date would have on this ratio  EVENT  The repayment of principal on an interest only loan The Interest coverage ratio is measured by Earnings before interest and tax   Finance costs  State the effect the following event occurring on the reporting date would have on this ratio  EVENT  Recognising a gain from the cash sale of a non current asset Cash flow per share is measured by Net operating cash flow   Weighted average number of shares on issue  State the effect the following event occurring on the reporting date would have on this ratio  EVENT  The repayment of principal on an interest only loan

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Question

Return on equity (ROE) is measured by Profit / Average total equity Assume ROE is less than 100% and that the cash balance remains positive.

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