# Financial and Management Accounting: Calculating Ratios and Capital Budgeting for Greggs plc and Tekna Electronics

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FINANCE AND
MANAGEMENT
ACCOUNTING
INTRODUCTION...........................................................................................................................4
a) Calculating ratios for Greggs plc.......................................................................................4
b) showing calculations of capital budgeting for Tekna electronics...............................12
c) Preparing Cash Budget for Tekna...................................................................................16
a) Interpretation of calculated ratios....................................................................................17
b) Explaining different types of budgets and reasons for selecting most suitable plan
for Tekna Electronics (TE)....................................................................................................18
CONCLUSION.............................................................................................................................21
REFERENCES............................................................................................................................22
INTRODUCTION
Financial accounting is collection of data for formulating statements. Management
accounting is internal process used for managing, monitoring business transactions. In
modern era, finance and management accounting are two different concepts widely
used for proper allocation of funds. The current report will include calculation of Greggs
plc. ratios from financial statements given. Case study will give as well provide capital
budgeting & cash budget calculations for Tekna Electronics. Present report will
comprise interpretation of ratios & type of budget suitable for Tekna Electronics.
a) Calculating ratios for Greggs plc
Operating profit ratio
Particulars Formula 2018 2019
Operating profit 82.6 114.8
Revenue 1029.3 1167.9
Operating profit
ratio
Operating Profit/
Revenue*100
82.6/1029.3*100
8.02
114.8/1167.9*100
9.82
Gross profit ratio
Particulars Formula 2018 2019
Gross profit 650 749.8
Revenue 1029.3 1167.9
Gross profit ratio Gross
profit/Revenue*100
650/1029.3*100
63.14
749.8/1167.9*100
64.2
Net profit ratio
Particulars Formula 2018 2019
Net profit 65.7 87
Revenue 1029.3 1167.9
Net profit ratio Net
profit/Revenue*100
65.7/1029.3*100
6.38
87/1167.9*100
7.44
Current ratio
Particulars Formula 2018 2019
Current assets 140.6 142.3
Current liabilities 145.2 208.7
Current ratio Current
assets/Current
liabilities
140.6/145.2
0.96
142.3/208.7
0.68
Acid test ratio
Particulars Formula 2018 2019
Liquid assets 140.6-20.8 142.3-23.9
Current liabilities 145.2 208.7
Acid test ratio Current assets-
closing
inventory/Current
liabilities
(140.6-20.8)/145.2
0.82
(142.3-23.9)/208.7
0.56

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