Answer 2 qns:
Statement of Financial Position as at 31 December
(in thousands of Dollars)
2010 2009
ASSETS
Non-current assets
Property, plant and equipment 1300 1400
Other tangible assets 100 150
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1400 1550
Current assets
Inventories 550 380
Trade receivables 750 560
Other current assets 85 80
Cash and cash equivalents 165 65
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1550 1085
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Total Assets 2950 2635
EQUITIES AND LIABILITIES
Ordinary shares of $1 each 500 500
Retained earnings 600 400
Other components of equity 500 500
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Total Equity 1600 1400
Non-current liabilities
Long-term borrowings 600 550
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Total non-current liabilities 600 550
Current liabilities
Trade payables 390 280
Bank overdraft 120 165
Current portion of long-term 150 100
borrowings
Current tax payable 40 60
Short-term provisions 50 80
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Total current liabilities 750 685
Total liabilities 1350 1235
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Total equity and liabilities 2950 2635
Income Statement year (in thousands of Dollars)
2010 2009
Sales (60% credit and 40% cash) 1800 2000
Cost of Sales (900) (1000)
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Gross Profit 900 1000
Other income 80 60
Distribution cost (250) (260)
administrative expenses (200) (200)
other expenses (30) (40)
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Profit from operation 500 560
Finance costs (120) (100)
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Profit before tax 380 460
Income tax expense (76) (92)
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Profit for the year 304 368
1. Calculate the following ratios for 2009 and 2010
(A) 2010 2009
1. Operating Profit Margin
2. Net Profit Margin
3. Return on Capital Employed
4. Gross profit margin
5. Inventories collection Period
6. Receivables collection Period
7. Payables Period
8. Gearing Ratio
9. Current Ratio
10. Quick Ratio
(B)
2. Briefly advise abc's CEO on his company's financial performance and position using the financial ratios calculated in part (a) above.
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