Answered step by step
Verified Expert Solution
Question
1 Approved Answer
The financial statements for Theta Ltd for year ended 30 November 2022 are given below. Statement of Comprehensive Income/Profit & Loss Statement a) Calculate the
The financial statements for Theta Ltd for year ended 30 November 2022 are given below. Statement of Comprehensive Income/Profit \& Loss Statement a) Calculate the following working capital and liquidity ratios for Theta Ltd for the year ended 30 November 2022 : - Inventory Holding Period - Trade Receivable Days - Trade Payable Days - Current Ratio - Quick Ratio ('Acid Test') (10 marks) b) The equivalent ratios for Theta Ltd for the year ended 30 November 2021 were: - Inventory Holding Period =40 days - Trade Receivable Days =58 days - Trade Payable Days =75 days - Current Ratio =1.10 - Quick Ratio =0.35 Compare the results for 2022 computed in part a) with the 2021 listed above, and discuss Theta Ltd's management of working capital and liquidity position. (10 marks) c) Theta Ltd's warehouse manager has asked for your advice on how to manage the inventory (stock) levels for one particular stock line which the company uses in the manufacturing process. The company operates for 310 days a year. The cost of placing each order is 20 and it costs 1 to hold one item of this stock line for one year. You have been provided with the following information about the stock lins. i. Calculate the following: - Re-Order Level to Prevent Stock-Outs - Economic Order Quantity - Minimum Stock Level - Maximum Stock Level (11 marks) ii. Referring to parti, explain to the warehouse manager the meaning of your calculations for 'Re-Order Level to Prevent Stock-Outs' and 'Economic Order Quantity
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started