Skills of The Manager Consultant

Skills of The Manager
Consultant

Contents
MAIN BODY..................................................................................................................................3
Question 1........................................................................................................................................3
A. Calculate the financial ratio for Omnipresent plc for the year 2021 and 2022.......................3
B. Interpret the information from the viewpoint of the shareholders..........................................4
C. Explain the limitations of ratios while evaluating the performance of the business...............4
D. Differentiate between management accounting and financial accounting by using relevant
examples......................................................................................................................................4
Question 3........................................................................................................................................5
A. By using investment appraisal technique appraise the following project...............................5
B. State the project which should be selected among the two proprietor....................................7
C. State the factor which will help in making final decision regarding the project....................7
D. Evaluate the use of Net Present Value of Investment appraisal.............................................7
Question 4........................................................................................................................................7
A. Prepare Cash Budget...............................................................................................................7
B...................................................................................................................................................8
REFERENCES................................................................................................................................9

MAIN BODY
Question 1
A. Calculate the financial ratio for Omnipresent plc for the year 2021 and 2022.
S. No Particular Formulas 2021 2022
1. Gross profit
margin
Gross Profit /
Sales * 100
= 24900 / 84700
*100 = 29.40%
= 37600 /
110800 * 100 =
33.94%
2. Operating profit
margin
Operating Profit /
Sales * 100
= 3200 / 84700 *
100 = 3.78%
= 6600 / 110800
* 100 = 5.96%
3. Return on
ordinary
shareholders’
funds
Net Income /
Shareholder’s
Equity
= 3300 / 54900 =
0.06 times
= 5500 / 60400 =
0.09 Times
4. Current ratio Current assets /
current liabilities
= 23600 / 8000 =
2.95 times
= 31700 / 11100
= 2.86 Times
5. Acid test ratio Liquid assets /
current liabilities
= (23600 –
11400) / 8000 =
1.525 times
= (31700 –
14200) / 11100 =
1.58 Times
6. Inventories
turnover period
(Average
inventory / Cost
of goods sold) *
365
= (11400 /
59800) * 365 =
69.58 Days
= (14200 /
73200) * 365 =
70.80 Days
7. Settlement
period for
receivables
Account
Receivables / Net
sales * 365
= 12200 / 84700
* 365
= 52.57 Days
= 17500 /
110800 * 365
= 57.65 Days
8. Gearing ratio Debt / equity = 3000 / 14000
= 0.21
= 3000 / 14000
= 0.21
9. Earnings per
share
Net Income of
the company /
total number of
= 3300 / 14000
= 0.24
= 5500 / 14000
= 0.39