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Accounting For Managers Essay

   

Added on  2020-07-23

11 Pages2013 Words30 Views
ACCOUNTING FOR MANAGERS

TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1QUESTION 1...................................................................................................................................1A) Analyzing financial performance of Nimbin....................................................................1b. Commenting on the profitability, liquidity and solvency aspect of Nimbin pertaining to2016........................................................................................................................................6QUESTION 2...................................................................................................................................6a. Assessing whether chef is an asset for the restaurant in monetary terms...........................6b. Assessing the extent to which accounting information helps other entities in decisionmaking....................................................................................................................................6c. Indicating the effect of business transactions on financial statements...............................7CONCLUSION................................................................................................................................8REFERENCES................................................................................................................................9

INTRODUCTION In the business unit, manager conducts ratio analysis with the motive to get informationabout the financial position and performance. In this, report will shed light on the profitability,liquidity and solvency aspect of Nimbin. Besides this, it will provide deeper insight about themanner in which business transactions affect financial statements. QUESTION 1A) Analyzing financial performance of Nimbin Ratio analysis of Nimbin for the year 2016 along with the industry averages are as follows: 1. Return on total assets Ratios FormulasNimbin PtyLimitedIndustryaverageNet income 4362Average total assets (29935+ 28045) / 2= 28990Rate of return on total assetsNet income /Average totalassets * 10015%22%2. Rate of return on ordinary equity Ratios Formulas Nimbin PtyLimitedIndustryaverageNet income 4362Shareholder's equity14215Rate of return on ordinary equityNet income /shareholdersequity * 10031%20%3. Profit marginRatios Formulas Nimbin PtyLimitedIndustryaverage1

Gross profit 19900Net profit4362Net sales55000GP margin Gross profit / netsales * 10036%NP margin Net profit / netsales *1008%4%4. Earnings per shareRatiosFormulasNimbin PtyLimitedIndustryaverageNet income after dividend 4362- 50 = 4312common shares outstanding7200Earnings per share Net income –preferred dividend/ Weightedaverage commonshare outstanding .6045c5. Price-earnings ratioRatiosFormulasNimbin PtyLimitedIndustryaverageEarning value per share.60Market value per share12Dividend yield ratioMPS / EPS20126. Dividend yieldRatiosFormulasNimbin PtyLimitedIndustryaverage2

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