Accounting Principles and Practices for Aroa Biosurgery Ltd: A Ratio Analysis

Accounting Principles
and Practices
AROA BIOSURGERY LTD

Table of content
 INTRODUCTION
 Ratio Analysis
 Ratio Interpretation
 Conclusion
 REFERENCES

INTRODUCTION
 Accounting principles are denoted as fundamentals behind projecting the accounting books and
statements.
 These are the key requirements that direct the books of accounts to be presented in the books in the most
efficient manner.
 This report is based on the case study of Aroa Biosurgery Ltd in context to its financial management
practices.
 The company is founded in the year 2008 contain the headquarter in Auckland, Newland.
 Company is currently listed under the Australian stock exchange.
 The organisation is involved under manufacture and producing medical and surgical products that can
provide key medical requirement to cure the complex wounds and soft tissue reconstruction.

Ratio Analysis
2020 2021
Gross profit ratio Gross profit / sales * 100 18737 / 25076 * 100
= 74.72%
15524 / 22342 * 100
= 69.48%
Operating profit margin Operating profit / sales * 100 (2843) / 25076 * 100
= -11.34%
(17991) / 22342 * 100
= -80.52%
Current ratio Current asset / current liability 17979 / 35210
=.51
48749 / 15292
= 3.18
Quick ratio Current asset – inventory / current
liability
17979 – 4005 / 35210
= .40
48749 – 3608 / 15292
= 2.95
Asset turnover ratio Sales / average total asset 25076 / 79655 (79655 + 79655 /
2)
= .31
22342 / 62809 (79655 + 45963 /
2)
= .36
Inventory turnover ratio Cost of good sold / average
inventory
6339 / 3608 (3608 + 3608 / 2)
= 1.76
6818 / 3807 (3608 + 4005 / 2)
= 1.79