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Sadaf manufacturing store is functioning in Karachi from last ten years. They have three retail store where they provide home groceries and other relevant products.

Sadaf manufacturing store is functioning in Karachi from last ten years. They have three retail store where they provide home groceries and other relevant products. Their business is smoothly functioning in good competitive environment. Liquidity position of company is stable and have good market reputation so financial institutions are not reluctant to provide any financial assistance whenever required by the company.

Short term loan was taken at 11% rate per year and long term loan was taken at 11.5%. Marketable securities will earn 9% interest to company.

Marvi Chain Store

BALANCE SHEET

As at December 31, 2019

cash

375000

Ac payable

65000

A/c receivable

250000

short term loan

100000

Marketable sec

25000

bill payable

22,700

Inventory ending

27500

tax payable

12815

Prepaid Rent

8000

Accrued expenses

5000

Supplies

15000

total Current liabilites

160,515

Total Current Assets

700500

Long term loan

50,000

210515

Owner's equities

capital

222,300

Net Profit

570,935

plant

80000

793,235

Less: acc. dep

13200

66800

Machinery

325000

Less:acc. dep

21750

303250

Assets

1003750

Equities

1,003,750

Instruction:

  1. Being a business student who have completed basic finance subject, please review this Balance Sheet and suggest what errors you found in it.
  2. What this company should do to improve its performance?
  3. You can take necessary assumptions keeping in mind nature of business

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