Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The following relates to a firm: Statement of Financial Position Figures in Sh. 2018 2017 2016 Cash 308,000 356,250 368,000 Accounts receivables 885,000 625,000 492,000

The following relates to a firm:

Statement of Financial Position

Figures in Sh. 2018 2017 2016 Cash 308,000 356,250 368,000 Accounts receivables 885,000 625,000 492,000 Inventory 1,115,000 825,000 530,000 Prepaid expenses 97,000 93,750 40,000 PPE 2,775,000 2,550,000 2,295,000 Total assets 5,180,000 4,450,000 3,725,000 Accounts payable 1,289,000 752,500 492,500 Loan 975,000 1,025,000 825,000 Share capital (Sh. 10 par) 1,625,000 1,625,000 1,625,000 Retained earnings 1,291,000 1,047,500 782,500 Total liability and equity 5,180,000 4,450,000 3,725,000

Income Statement 2018 2017 Sales 6,725,000 5,300,000 Cost of sales 4,102,250 3,445,000 Gross profit 2,622,750 1,855,000 Other operating expenses 2,085,500 1,339,800 Operating income 537,250 515,200 Interest expense 111,000 123,000 Income before tax 426,250 392,200 Income tax 85,250 78,450 Net income 341,000 313,750

Page 2 of 2

Required: a) Evaluate the Firms efficiency, profitability and solvency for the years 2018 and 2017 (12 marks) b) What additional information would you require to conclude your evaluation (8 marks)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting Principles Volume 2

Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara A. Trenholm, Valerie A. Kinnear, Joan E. Barlow

6th Canadian Edition

1118557328, 978-1118557327

More Books

Students also viewed these Accounting questions

Question

Would you recommend this program to your employer? Why?

Answered: 1 week ago