question archive The following details are for the business of Peter Smith, who is worried about the profitability and financial structure of his business at 30 June 2015, especially since the bank is requiring repayment of his overdraft
The following details are for the business of Peter Smith, who is worried about the profitability and financial structure of his business at 30 June 2015, especially since the bank is requiring repayment of his overdraft
Subject:AccountingPrice: Bought3
The following details are for the business of Peter Smith, who is worried about the profitability and financial structure of his business at 30 June 2015, especially since the bank is requiring repayment of his overdraft. 30 June 2014 30 June 2015 $ $Sales (credit) 60,000 90,000Cost of goods sold 39,000 63,000All other expenses 12,000 21,000Cash at bank 12,000 (18,000)Inventory 18,000 33,000Trade debtors 12,000 30,000Non-current assets (net) 24,000 48,000Trade creditors 6,000 9,000Peter Smith, Capital 60,000 72,000Non-current liabilities – 12,000Inventory at 1 July 2013 was $15,000Trade debtors at 1 July 2013 were $10,000Calculate the following ratios for 2014 and 2015Net profit marginReturn on owners’ equityCurrent ratioAcid test ratioGearingInventory turnover periodWrite a short report to the owner about:ProfitabilityShort term liquidityLong term solvency
