FINANCIAL ANALYSIS

Financial Analysis

Financial Analysis

Solution # 1

Sevrat Ltd

Manufacturing, Trading, Profit And Loss And

Appropriation Account For Year Ended 31 May Yr 3

 

 

 

 

Raw Materials Consumed

£

£

£

Stock of Raw material (Beginning)

 

 

212680.00

Add: Stock of Raw material Purchase

 

632620.00

 

Add : Carriage inwards

 

13550.00

 

 

 

646170.00

 

 

 

 

 

Raw Material Net purchase

 

646170.00

 

Raw Material available for use

 

858850.00

 

Less: Stock of Raw material (ending)

 

(253610.00)

 

Cost of raw materials consumed

 

 

605240.00

Manufacturing wages

 

574100.00

 

Direct Cost

 

 

574100.00

 

 

 

 

Factory Overhead

 

 

 

Factory power

 

97850.00

 

Indirect Material

 

162170.00

 

Rent and Rates (1/3)

 

12740.00

 

Light and Heat ( 58401 X 1/3)

 

19467.00

 

Insurance (27270 X 1/3)

 

9090.00

 

Depreciation (Plant and Machinery)

 

32385.00

 

Total Factory Overhead

 

 

333702.00

Manufacturing Cost

 

 

1513042.00

Add: Stock of Work-In-Progress (Beginning)

 

163410.00

 

Less: Stock of Work-in-Progress (ending)

 

(141900.00)

 

Work in Progress for Yr 3

 

 

21510.00

 

 

 

 

Cost of production of goods completed c/d

 

 

1534552.00

 

£

£

£

Sales

 

 

1964900.00

Less : Cost of Goods sold

 

 

 

Stock of Finished goods (Beginning)

 

190240.00

 

Add: Cost of production of goods completed

 

1534552.00

 

Stock of Finished goods available for sale

 

1724792.00

 

Less: Stock of Finished Goods (ending)

 

(212100.00)

 

Cost of goods sold

 

 

1512692.00

Gross Profit

 

 

452208.00

 

 

 

 

Depreciation:

 

 

 

Freehold Premises @ 2%

3284.00

 

 

Office Equipment @ 10%

10221.00

 

 

Motor Vehicles @ 30% RBM

25398.00

 

 

Total Depreciation

 

38903.00

 

Expenses

 

 

 

Insurance

18180.00

 

 

Rent And rates

25480.00

 

 

Heat and light

38934.00

 

 

Bad Debt Expense

3906.00

 

 

Director Fees

77810.00

 

 

Total operating expenses

 

164310.00

 

 

 

 

203213.00

Net Profit for year

 

 

248995.00

Add: Surplus B/f 1/6 year 2

 

 

203500.00

 

 

 

452495.00

Adjustments

 

 

 

Less: Dividend (500000x 11%)

 

(55000.00)

 

Preference dividend Share @ 7%

 

(24500.00)

 

General Reserve

 

(15000.00)

 

Fixed assets Replacement Reserve

 

(15000.00)

 

 

 

 

(109500.00)

Surplus Carried Forward

 

 

342995.00

Solution # 2

Lang Enterprises

Ordinary Share Capital

Dr

 

 

 

 

Cr

Date

Detail

£

Date

Detail

£

 

Bank

600,000

 

 

 

 

 

 

 

Ordinary Shares

600,000

 31/03

C/d 

600,000

 

 

600,000

600,000

Lang Enterprises

Share Premium

Dr

 

 

 

 

Cr

Date

Detail

£

Date

Detail

£

 

Bank

150,000

 

 

 

 

 

 

 

Share Premium

150,000

30/03

C/d

150,000

 

 

150,000

 

 

150,000

Lang Enterprises

Allotment And Application

Dr

 

 

 

 

Cr

Date

Detail

£

Date

Detail

£

1-Nov

Bank A/c

400,000

1-Nov

Share Application

400000

8-Nov

Share Application

100,000

8-Nov

Bank A/c

100,000

8-Nov

Share Application

300,000

8-Nov

Share capital

300,000

30-Nov

Share Allotment

300,000

30-Nov

Share capital

300,000

30-Nov

Bank A/c

300,000

30-Nov

Share Allotment

300,000

 

 

 

 

 

 

 

C/d

600,000

 

 

600,000

Lang Enterprises

First And Final Call Account

Dr

 

 

 

 

Cr

Date

Detail

£

Date

Detail

£

15-Feb

Ordinary Share

150,000

15-Feb

Share first and final call

150,000

 

 

 

 

 

 

15-Feb

Share first and final call

150,000

15-Feb

Bank A/c

150,000

 

 

 

 

 

 

15-Feb

C/d 

150,000 

 

 

150,000

 

 

150,000

Lang Enterprises

Forfeited Shares

Dr

 

 

 

 

Cr

Date

Detail

£

Date

Detail

£

 15/2

Share Capital

4,000

 

 

 

 

 

 

15/2

Share Forfeited

4000

 

 

 

 

15/2

Share Forfieted

4000

15/2

Bank

4000

15/2

C/d

4,000

 

 

4,000 4,000

Lang Enterprises

Weather by (share Holder)

Dr

 

 

 

 

Cr

Date

Detail

£

Date

Detail

£

 

Bank 3,200

 

 

 

 

 

 

 

Share Capital

3,200

30/03

C/d

3,200

 

 

3,200

 

 

3,200

Solution # 3

Ratio For Year Ended 31 May Yr 8

York Ltd

Ripon Ltd

Return On Capital Employed

44.44

%

50

%

Gross Profit % of Sales

24

%

19

%

Net Profit % of Sales

4

%

4

%

Current Ratio

2.3

 

1.4

 

Acid test Ratio

1.10

 

0.53

 

Debtor Collection period

12

Days

4

Days

Workings

York Ltd

Ripon Ltd

Return On Capital Employed

Earnings After Tax + Interest

Average Capital Employed

Capital Employed

Share Holder Equity + Long term Debt

 

 

 

Capital Employed

270+0

600+120

Capital Employed

270

720

 

 

 

Return On capital Employed

120/270

360/720

Return On capital Employed

44.44%

50%

Gross Profit % of sales

Gross Profit

Sales

Sales

3000

9000

Cost of Sales

(2280)

(7290)

Gross Profit

720

1710

 

 

 

 

720/3000

1710/9000

Gross Profit % of sales

24%

19%

Net Profit % of sales

Net Profit

Sales

 

 

 

 

120/3000

360/9000

Net Profit % of sales

4%

4%

Ratio

Current Assets

Current Liabilities

Current Assets

110+92+14

156+96

Current Assets

216

252

Current Liabilities

96

180

 

 

 

 

216/96

252/180

Current Ratio

2.3:1

1.4:1

Acid test Ratio

Quick Assets

Current Liabilities

Quick Assets

Current Assets - Stock

 

 

 

Current Assets - Stock

216-10

252-156

 

106

96

 

106/96

96/180

Acid Test Ratio

1.1:1

0.5:1

Debtor Turnover

Average Debtors x 365

Net Credit Sales

 

(92*365) / 3000

(96*365) / 9000

Days

11.19 ~ 12 days

4 days

Solution # 4

Retsina Ltd

Yr 1

Yr 2

Yr 3

Yr 4

Gross Profit to Sales Percentage (to 1 decimal place)

42.0%

44.4%

45.8%

43.8%

Percentage markup( To one decimal place)

72.4%

79.9%

84.5%

77.9%

Stock Turnover to two decimal places

2.76

2.50

2.21

2.12

Trade Debtor collection period ( to the nearest day)

84

91

90

97

Repayment Period For creditors ( to the nearest day)

73

74

78

86

Gross Profit % of sales

Gross Profit

Sales

Gross Profit Margin

0.4

0.4

0.5

0.4

Percentage Markup

Gross Margin X 100

 

1-Gross Margin

Percentage Markup

72.4%

79.9%

84.5%

77.9%

Stock Turn Over

Cost of goods sold

 

Average stock

Cost of goods sold

145

150

160

180

Average stock

53

60

73

85

Stock Turn Over

2.76

2.50

2.21

2.12

Debtor Turnover

Net Credit Sales

Average Debtors

 

 

Debtor Collection Period

365/Debtor turnover

Net Credit Sales

250

270

295

320

Average Debtors

58

68

73

85

Debtor Turn Over

4

4

4

4

Debtor Collection Period (Days)

84

91

90

97

Creditors Turnover

Net Credit Purchases

Average Creditors

Creditors Collection Period

365/Creditor turnover

Net Credit Purchases

150

160

175

190

Average Creditors

30

33

38

45

Creditors Turn Over

5

5

5

4

Creditors Collection Period (Days)

73

74

78

86

Solution # 5

Humdrum Ltd

Profit And Loss Appropriation ...