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The financial summary of XYZ Ltd. for the year ending 31-03-2022 includes: Current Assets: Cash: $2,10,000 Sundry debtors: $6,80,000 Short term investment: $3,90,000 Stock: $20,50,000

The financial summary of XYZ Ltd. for the year ending 31-03-2022 includes:

Current Assets:

  • Cash: $2,10,000
  • Sundry debtors: $6,80,000
  • Short term investment: $3,90,000
  • Stock: $20,50,000
  • Prepaid expenses: $30,000

Current Liabilities and Equity:

  • Current liabilities: $9,00,000
  • 11% Debentures: $16,00,000
  • Equity share capital: $22,50,000
  • Retained earnings: $10,00,000

Profit & Loss Statement:

  • Sales (40% cash sales): $82,00,000
  • Less: Cost of goods sold: $57,00,000
  • Profit before interest & tax: $25,00,000
  • Less: Interest: $2,50,000
  • Profit before tax: $22,50,000
  • Less: Tax @28%: $6,30,000

Net Profit: $16,20,000

Calculate: (i) Quick assets ratio, (ii) Debt to total assets ratio, (iii) Net profit ratio, and (iv) Receivables conversion period.

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