question archive Ratio Analysis Task Alpha and Beta Ltd Trading Profit and Loss Accounts (Income Statements) Year Ended 31st March 2020 Alpha Beta £ £ Sales 100,000 200,000 Less cost of Sales Opening stock 6,000 29,000 Purchases 44,000 94,000 50,000 123,000 Closing Stock 5,000 45,000 31,000 92,000 Gross Profit 55,000 108,000 Operating Expenses 25,000 58000 Net Profit before Tax 30,000 50,000 Balance Sheet As at 31st March 2020 Alpha Beta £ £ Fixed Assets 80,000 145,000 Current Assets Stock 5,000 31,000 Debtors 4,000 25,000 Bank Balance 6,000 18,000 15,000 74,000 Less Current Liabilities Creditors 9,000 51,000 6,000 23,000 86,000 168,000 Financed by Capital 86,000 Ordinary Shares 125,000 Retained Profit 43,000 168,000 Task: Both Alpha and Beta are in the same line of business
Ratio Analysis Task Alpha and Beta Ltd Trading Profit and Loss Accounts (Income Statements) Year Ended 31st March 2020 Alpha Beta £ £ Sales 100,000 200,000 Less cost of Sales Opening stock 6,000 29,000 Purchases 44,000 94,000 50,000 123,000 Closing Stock 5,000 45,000 31,000 92,000 Gross Profit 55,000 108,000 Operating Expenses 25,000 58000 Net Profit before Tax 30,000 50,000 Balance Sheet As at 31st March 2020 Alpha Beta £ £ Fixed Assets 80,000 145,000 Current Assets Stock 5,000 31,000 Debtors 4,000 25,000 Bank Balance 6,000 18,000 15,000 74,000 Less Current Liabilities Creditors 9,000 51,000 6,000 23,000 86,000 168,000 Financed by Capital 86,000 Ordinary Shares 125,000 Retained Profit 43,000 168,000 Task: Both Alpha and Beta are in the same line of business
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Ratio Analysis Task
Alpha and Beta Ltd
Trading Profit and Loss Accounts (Income Statements)
Year Ended 31st March 2020
| Alpha | Beta | |||
| £ | £ | |||
| Sales | 100,000 | 200,000 | ||
| Less cost of Sales | ||||
| Opening stock | 6,000 | 29,000 | ||
| Purchases | 44,000 | 94,000 | ||
| 50,000 | 123,000 | |||
| Closing Stock | 5,000 | 45,000 | 31,000 | 92,000 |
| Gross Profit | 55,000 | 108,000 | ||
| Operating Expenses | 25,000 | 58000 | ||
| Net Profit before Tax | 30,000 | 50,000 |
Balance Sheet
As at 31st March 2020
| Alpha | Beta | |||
| £ | £ | |||
| Fixed Assets | 80,000 | 145,000 | ||
| Current Assets | ||||
| Stock | 5,000 | 31,000 | ||
| Debtors | 4,000 | 25,000 | ||
| Bank Balance | 6,000 | 18,000 | ||
| 15,000 | 74,000 | |||
| Less | ||||
| Current Liabilities | ||||
| Creditors | 9,000 | 51,000 | ||
| 6,000 | 23,000 | |||
| 86,000 | 168,000 | |||
| Financed by | ||||
| Capital | 86,000 | |||
| Ordinary Shares | 125,000 | |||
| Retained Profit | 43,000 | |||
| 168,000 |
Task:
Both Alpha and Beta are in the same line of business. All the purchases and sales of both businesses are on credit.
Using the information above:
- Calculate 4 ratios to compare the profitability of the two businesses.
- Calculate 2 ratios to compare the liquidity of the two businesses.
- Calculate 1 ratio for efficiency.
Which of the 2 businesses demonstrates better financial management, control and overall better health?
Option 1
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Option 2
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