Introduction to Financial Accounting: Ratio Analysis and Bank Account

Table of Contents
INTRODUCTION 3
MAIN BODY 4
CONCLUSION 10
REFERENCES 1

INTRODUCTION
MAIN BODY
Question 1a)
(a) Bob's Trading Account for year ended 30th April 2020
Particular Amount
Sales 30000
-Opening Stock -4700
-Purchases -15700
Closing Stock 4400
Gross Profit 14000
(b) Bob's Profit and Loss account
Particulars Amount
Gross Profit 14000
-Light and Heat -260
-Rent -4500
-Insurance -120
-Shop Wages -4420
Net Profit 4700
(c)Balance Sheet for year ended 30th April 2020
Particulars Amount
Assets:
Fixed Assets:
Fittings 13000

Current Assets:
Cash at Bank 610
Cash in Hand 100
Debtors 120
Inventory 4400
Total Assets 18230
Liabilities:
Capital 15000
-Drawings -3500
Net Profit 4700 16200
Current Liability
Creditors 2030
Total Liability 18230
Question 2a)
Ratio Analysis:
Ratio Year 1 Year 2
Gross Profit Margin = (Revenue – COGS)/ Revenue 0.38 0.32
ROCE = EBIT/ Capital Employed 0.12 0.07
Current Ratio= Current assets/ Current Liabilities 3.16 2.84
Trade Payable Period= (Trade Payable/ COGS) x 365 67.68 65.93
Trade Receivable Period= (Trade Receivables/ net sales) x 365 60.58 65.54
Gross Profit Margin = (Revenue – COGS)/ Revenue
Year 1 Year 2