The following information has been collected from two London-based companies. The accounts are drawn up to 31st December 2021. Profit and Loss Account for the year ended 31st December 2021 (Figures are in £000) Particulars XYZ ABC Sales 3,690 4,586 Less: Cost of Goods Sold (Including purchases) (2,146) (2,690) Gross Profit 1,544 1,896 Less: Selling & Distribution Expenses Less: Depreciation (1,103) (1,253) Earnings before Interest & Tax or Operating Profit 441 643 Less: Interest (225) (192) Earnings before Tax 216 451 Less: Taxes (86) (180) Earnings after Tax or Net Profit 130 271 Balance Sheet as at31st December 2021 (Figures are in £000) Assets XYZ ABC Fixed Assets 4,542 4,790 Current Assets Account Receivables 274 313 Inventory 654 702 Cash 140 163 Total Current Assets 1,068 1,178 Total Assets 5,610 5,968 Liabilities Capital 3,824 4,310 Long Term Debt 883 760 Current Liabilities Account Payables 519 572 Other Current Liabilities 384 326 Total Current Liabilities 903 898 Total Liabilities and Equity 5,610 5,968 Liquidity Ratios – Calculate and analyse at least one of the following: Current Ratio Quick Ratio
The following information has been collected from two London-based companies. The accounts are drawn up to 31st December 2021. Profit and Loss Account for the year ended 31st December 2021 (Figures are in £000) Particulars XYZ ABC Sales 3,690 4,586 Less: Cost of Goods Sold (Including purchases) (2,146) (2,690) Gross Profit 1,544 1,896 Less: Selling & Distribution Expenses Less: Depreciation (1,103) (1,253) Earnings before Interest & Tax or Operating Profit 441 643 Less: Interest (225) (192) Earnings before Tax 216 451 Less: Taxes (86) (180) Earnings after Tax or Net Profit 130 271 Balance Sheet as at31st December 2021 (Figures are in £000) Assets XYZ ABC Fixed Assets 4,542 4,790 Current Assets Account Receivables 274 313 Inventory 654 702 Cash 140 163 Total Current Assets 1,068 1,178 Total Assets 5,610 5,968 Liabilities Capital 3,824 4,310 Long Term Debt 883 760 Current Liabilities Account Payables 519 572 Other Current Liabilities 384 326 Total Current Liabilities 903 898 Total Liabilities and Equity 5,610 5,968 Liquidity Ratios – Calculate and analyse at least one of the following: Current Ratio Quick Ratio
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The following information has been collected from two London-based companies. The accounts are drawn up to 31st December 2021.
Profit and Loss Account for the year ended 31st December 2021 (Figures are in £000)
|
Particulars |
XYZ |
ABC |
|
Sales |
3,690 |
4,586 |
|
Less: Cost of Goods Sold (Including purchases) |
(2,146) |
(2,690) |
|
Gross Profit |
1,544 |
1,896 |
|
Less: Selling & Distribution Expenses |
|
|
|
Less: |
(1,103) |
(1,253) |
|
Earnings before Interest & Tax or Operating Profit |
441 |
643 |
|
Less: Interest |
(225) |
(192) |
|
Earnings before Tax |
216 |
451 |
|
Less: Taxes |
(86) |
(180) |
|
Earnings after Tax or Net Profit |
130 |
271 |
Balance Sheet as at31st December 2021 (Figures are in £000)
|
Assets |
XYZ |
ABC |
|
Fixed Assets |
4,542 |
4,790 |
|
Current Assets |
|
|
|
Account Receivables |
274 |
313 |
|
Inventory |
654 |
702 |
|
Cash |
140 |
163 |
|
Total Current Assets |
1,068 |
1,178 |
|
Total Assets |
5,610 |
5,968 |
|
Liabilities |
|
|
|
Capital |
3,824 |
4,310 |
|
Long Term Debt |
883 |
760 |
|
Current Liabilities |
|
|
|
Account Payables |
519 |
572 |
|
Other Current Liabilities |
384 |
326 |
|
Total Current Liabilities |
903 |
898 |
|
Total Liabilities and Equity |
5,610 |
5,968 |
Liquidity Ratios – Calculate and analyse at least one of the following:Current Ratio - Quick Ratio
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