You are provided with the following gross profit details for theyear ending 30 t
ID: 2457660 • Letter: Y
Question
You are provided with the following gross profit details for theyear ending 30th June 2010 and comparative informationfrom the balance sheet:
$
Sales (credit) 6000
Openinginventory 2400
Purchases 10000
12400
Closing inventory 5000
GrossProfit 7400
52600
Balance sheet extract as at 30th June2009 2010
Total Assets 80000 50000
Accounts receivable 6000 5000
Inventory 2400 5000
Current assets 55000 25000
Current liabilities 10000 9500
You are required to calculate
Ø Current ratio
Ø Liquid ratio
Ø Rate of stock turnover
Ø Debtor collection period
Ø Total asset turn over
Explanation / Answer
Hey , This is quite simple. I will give you the formula . Just plug in the values and you will get theanswer. Current Ratio Current Assets / Current Liabilities Liquid Ratio ( Current Assets - Inventory ) / CurrentLiabilities Rate of Stock Turnover Cost of Goods Sold / Average inventory Debtor Collection Period 360 / Debtors Turnover Ratio Total Asset Turnover Cost of Goods Sold / Average Total Assets Current Ratio Current Assets / Current Liabilities Liquid Ratio ( Current Assets - Inventory ) / CurrentLiabilities Rate of Stock Turnover Cost of Goods Sold / Average inventory Debtor Collection Period 360 / Debtors Turnover Ratio Total Asset Turnover Cost of Goods Sold / Average Total AssetsRelated Questions
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