Question
The following information is an extract from the financial statements of Extreme-Experiences Pty Ltd. 2020 2019 Current Assets 409,500 292,500 Non-current Assets 2,275,000 1,768,000 Current
The following information is an extract from the financial statements of Extreme-Experiences Pty Ltd.
| 2020 | 2019 |
Current Assets | 409,500 | 292,500 |
Non-current Assets | 2,275,000 | 1,768,000 |
Current Liabilities | 221,000 | 169,000 |
Non-current Liabilities | 764,400 | 670,800 |
Total Revenue | 728,000 | 624,000 |
Total Expenses | 500,500 | 455,000 |
Required: Answer the following questions in the spaces provided below:
a) Calculate the following ratios for both 2019 and 2020. (6 marks)
| 2020 | 2019 |
Profit Margin (Correct your answer to 0.01%) |
|
|
Current Ratio (Correct your answer to 0.1) |
|
|
Debt to Total Assets Ratio (Correct your answer to 0.01%) |
|
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b) Comment on the Liquidity of Extreme-Experiences using the answers in part a). (2 marks)
c) Which ratio measures Solvency? Provide suggestions on how to improve the Solvency of Extreme-Experiences. (2 marks)
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