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Assignment: Accounting for Managers

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Added on  2021-06-17

Assignment: Accounting for Managers

   Added on 2021-06-17

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ACCOUNTING FORMANAGERSASSIGNMENT 2: FINANCIAL ANALYSISSTDUENT ID/NAME[Pick the date]
Assignment: Accounting for Managers_1
a)The ratio computations are as highlighted below.1)Gross Profit MarginGross Profit Margin = (Gross Profit/Revenue)*100Gross Profit Margin (2017) = (280000/1300000)*100 = 21.54%Gross Profit Margin (2018) = (340000/1500000)*100 = 22.67%2)Operating Profit MarginOperating Profit Margin = (Operating Profit/Revenue)*100Operating Profit Margin (2017) = (280000 -94000-78000)/1300000)*100 =8.31%Operating Profit Margin (2018) = (340000-128000-118000)/1500000)*100 = 6.27 %3)Return on ordinary shareholders’ fundReturn on ordinary shareholders’ fund = (Net profit after tax/Average Equity) Return on ordinary shareholders’ fund (2017) = (55000/((242000+243000)/2)) = 23%Return on ordinary shareholders’ fund (2018) = (45000/((243000+246000)/2)) = 18%4)Return on capital employed Return on capital employed = (Operating Profit/Capital Employed) Capital employed = Total assets – Current Liabilities Return on capital employed (2017) = (280000 -94000-78000)/(704000-111000) =18.21%Return on capital employed (2018) = (340000-128000-118000)/(760000-246000) = 18.29 %
Assignment: Accounting for Managers_2
5)Inventory Turnover (in Days)Inventory Turnover (in days) = 365*(Average Inventory/COGS)Average Inventory (2017) = (89000 +112000)/2 = $100,500Average Inventory (2018) = (112000+154000)/2 = $ 133,000Inventory Turnover (in days) (2017) = 365*(100500/1020000) =35.96Inventory Turnover (in days) (2018) = 365*(133000/1160000) = 41.856)Accounts Receivable Turnover (in days)Accounts Receivable Turnover (in days) = 365*(Average accounts receivables/Credit Sales)Average Accounts Receivables (2017) = (90000+117000)/2 = $103,500Average Accounts Receivables (2018) = (117000+164000)/2 = $ 140,500Accounts Receivable Turnover (2017) = 365*(103500/1300000) = 29.06Accounts Receivable Turnover (2018) = 365*(140500/1500000) =34.197)Accounts Payable Turnover (in days)Accounts Payable Turnover (in days) = 365*(Average accounts payable/Credit Purchases)Average accounts payable (2017) = (97000 + 111000)/2 = $104,000Average accounts payable (2018) = (111000 + 170000)/2 = $140,500Accounts Payable Turnover (2017) = 365*(104000/1043000) = 36.40Accounts Payable Turnover (2018) = 365*(140500/1202000) = 42.66 8)Current RatioCurrent Ratio = Current Assets/Current Liabilities
Assignment: Accounting for Managers_3

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