Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

These are the accounting ratios for a company between 2017 and 2018. Accounting Ratios 2017 2018 Percentage Change Profit Margin 2.52% 1.01% -59.85% 17.73% 7.73%

image text in transcribedimage text in transcribed

These are the accounting ratios for a company between 2017 and 2018. Accounting Ratios 2017 2018 Percentage Change Profit Margin 2.52% 1.01% -59.85% 17.73% 7.73% -56.38% Return on Capital Employed Income Gearing 81.39% 151.96% 86.72% Inventory Turnover Ratio 1.70 days 1.68 days -1.56% Debtors Turnover Ratio 29.38 days 30.89 days 5.12% Quick Ratio 50.45% 49.01% -2.86% Asset Gearing 80.35% 77.94% -3.01% 331.03% 371.60% Shareholder's equity ratio 12.25% Asset Cover -0.83 -0.74 -11.38% Current Ratio 51.42% 50.05% -2.66%% Looking at these accounting ratios, explain why the company would become insolvent. Also talk about the going concern position for the company. These are the accounting ratios for a company between 2017 and 2018. Accounting Ratios 2017 2018 Percentage Change Profit Margin 2.52% 1.01% -59.85% 17.73% 7.73% -56.38% Return on Capital Employed Income Gearing 81.39% 151.96% 86.72% 1.68 days -1.56% Inventory Turnover Ratio Debtors Turnover Ratio 1.70 days 29.38 days 30.89 days 5.12% Quick Ratio 50.45% 49.01% -2.86% Asset Gearing 80.35% 77.94% -3.01% 331.03% 371.60% 12.25% Shareholder's equity ratio Asset Cover -0.83 -0.74 -11.38% Current Ratio 51.42% 50.05% -2.66%% Looking at these accounting ratios, explain why the company would become insolvent. Also talk about the going concern position for the company

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

Financial And Managerial Accounting

Authors: Robert Meigs Jan Williams, Sue Haka, Mark S Bettner

16th Edition

0077557344, 978-0077557348

More Books

Students also viewed these Accounting questions

Question

1. Who is responsible for resolving this dilemma?

Answered: 1 week ago

Question

7. How might you go about testing these assumptions?

Answered: 1 week ago