Introductory Accounting: Ratio Analysis of Candy Club Holdings Limited

This report provides an analysis of accounting ratios for Candy Club Holdings Limited, a food and beverage company in the UK. It delves into the calculation and interpretation of various financial ratios, categorized into operating, financing, and investing ratios. The analysis includes the calculation of current ratio, quick ratio, receivables turnover, return on equity (ROE), return on assets (ROA), debt to equity (D/E) ratio, earnings before interest and taxes (EBIT), price earnings ratio (PER), and earnings per share (EPS) for the years 2018 and 2017. The report highlights the importance of these ratios in assessing the company's financial health, profitability, and efficiency, and how they aid in informed decision-making processes for managers. The conclusion emphasizes the usefulness of ratio analysis in comparing business performance and its role in financial management and accounting activities. Finally, the report references academic sources to support its findings.

Accounting
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Contents
Contents...........................................................................................................................................2
INTRODUTION..............................................................................................................................3
TASK 1............................................................................................................................................3
Calculation of ratio for identifying operational, financing and investing performance..............3
CONSLUSION................................................................................................................................5
REFRENCES...................................................................................................................................5
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INTRODUTION
Accounting is essential part of every business organization. It will help in providing accurate and
reliable information regarding business organization. To understand the concept CANDY CLUB
HOLDINGS LIMITED had been taken. The company provide food and beverage services in UK
to their customers. In this report use of various ratios, ho they calculate and importance of
operating financing and investing ration in analysis of organization performance has been
defined in brief manner.
TASK 1
Calculation of ratio for identifying operational, financing and investing performance
Operating ratio: Theses ratios are related with the operational activities of business organization.
Theses ratio is calculated to identify the net operating requirement of business organizations ad
how much profit did mangers able to gain from their operational activities. I this report
operational ration are calculated to measure its financial performance (Rhee, & et.al. 2015).
Current ratio
Particular Formula 2018 2017
Current ratio Current Assets /
Current Liabilities
1.45 2.51
Acid-test (quick) ratio
Particular Formula 2018 2017
Quick ratio Quick Assets/ Current
Liabilities
.48 1.64
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Receivables turnover
Particular Formula 2018 2017
Receivables turnover Net credit sales /
Credit sales
0.67 .30
Financing ratio: These ratio are calculate for the purpose of identifying financial performance of
business organization. It considered all the ratios through which mangers able to understand the
effete of fiancé activities . They include retune on equity, debt to equity and return on equity
ratio thorough which manger able to identify profits organization able to earn on investing in
assets and liabilities(de Abreu and et.al2019).
Return on Equity (ROE)
Particular Formula 2018 2017
Return on Equity Net income /
Shareholders equity
0.67 .30
Return on Assets (ROA)
Particular Formula 2018 2017
Return on Assets
(ROA
Net income / Average
total assts
0.67 .30
Debt to Equity (D/E)
Particular Formula 2018 2017
Debt to equity ratio Total Liabilities /
Total Equity
0.67 .30
Investing ratio: Theses are special kind of ratios through which manger able to recognize their
investment and initial cost benefits by suing ratio. It considers various type of ratio, price
earning, earnings per share. Which describe how organization will be able to earn money through
their shares.
Earnings before interest and taxes (EBIT)
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Particular Formula 2018 2017
Earnings before
interest and taxes
Total sales – cogs –
operating expenses
3597050 35039604
Price Earnings ratio (PER)
Particular Formula 2018 2017
Price Earnings ratio Price per share/
Earrings per share
0.67 .30
Earnings per share (EPS
Particular Formula 2018 2017
Earnings per share Net income/ Average
outstanding shares
0.67 .30
CONSLUSION
From the above analysis it has been concluded that ration are useful as with he use of ratio
calculation manger will be able to compare the profitably and performance of the business
organization. These are the essential part of financial management and accounting activities
through which manger can really recognised their pertain , investing and financial activities and
also useful in decision making process.
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REFRENCES
Books and journal
Rhee, S., Kim, S., Cho, J., Park, J., Hwan, K. Y., & Choe, J. G. (2015). Evaulation of response to
TARE treatment in advanced liver malignancy by Yittrium-90 (90Y) Time of Flight
PET/CT: Comparison with pretreatment 99mTc-MAA SPECT. Journal of Nuclear
Medicine, 56(supplement 3), 1281-1281.
de Abreu, K. S. F., Véras, A. S. C., de Andrade Ferreira, M., Madruga, M. S., Maciel, M. I. S.,
Félix, S. C. R., ... & Urbano, S. A. (2019). Quality of meat from sheep fed diets
containing spineless cactus (Nopalea cochenillifera Salm Dyck). Meat science, 148, 229-
235.
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