Calculate the following ratios for 2011 and 2012. Show all calculations. (Where an average figure is not available, add this as a comment.) Profit Margin Gross Profit margin Current Ratio Quick

Calculate the following ratios for 2011 and 2012. Show all calculations. (Where an average figure is not available, add this as a comment.)

Profit Margin

Gross Profit margin

Current Ratio

Quick Ratio

Receivables Turnover

Average Collection Period

Inventory Turnover

ATTACHMENT PREVIEW

Download attachment

The following information relates to Arte’s Gallery.
The owner, P Arte, is concerned about the
profitability and liquidity of the business.
ARTE’S GALLERY
INCOME STATEMENT
FOR THE YEAR ENDED 30 JUNE 2012
30 JUNE 2011
INCOME
Sales revenue
$293 500
less Sales Returns and Allow
$
950
Discount Allowed
10 000
10 950
Net Sales Revenue
282 550
$250 550
Less Cost of Sales
Inventory 1 July 2011
80 250
add
Purchases
$156 000
add
Freight Inwards
12 150
less Discount Received
168 150
2 000
Net Cost of Purchases
Cost of Goods Avail for Sale
less Inventory 30 June 2012
Cost of Sales
166 150
246 400
50 000
196 400
167 800
GROSS PROFIT
86 150
LESS EXPENSES
Selling and Distribution
Freight Outwards
11 800
Sales Staff Wages
120 000
Advertising
4 700
Shop Rent
22 000
Depreciation Shop shelving
7 000
165 500
Administrative
Local government taxes
1 150
Insurance
2 400
3 550
Financial
Interest Expense
1 400
170 450
162 410
LOSS
$(84 300)
ARTE’S GALLERY
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2012
Capital P. Arte 1 July 2011
$192 900
Less Loss
84 300
108 600
Less Drawings
4,000
Capital P Arte 30 June 2012
$104 600

Unlock Solution Unlocking…

ARTE’S GALLERY
BALANCE SHEET
AS AT 30 JUNE 2012
30 JUNE 2011
Current
Cash and Cash equivalents
$37 000
Accounts Receivable
$19 600
18 200
Inventory
50 000
?
Prepaid insurance
600
nil
Accrued sales revenue
1 500
$71 700
nil
Non-Current
Office Equipment
1 000
Shop Shelving
$79 000
Less
LIABILITIES
Current
Bank Overdraft
9 000
nil
Accounts Payable
26 600
17 550
Accrued Expenses
500
nil
36 100
NET ASSETS
$104 600
EQUITY
Additional Information:
All Sales were on credit.
Required:
(a) Calculate the following ratios for 2011 and 2012.
Show all calculations.
(Where an average
figure is not available, add this as a comment.)
Profit Margin
Gross Profit margin
Current Ratio
Quick Ratio
Receivables Turnover
Average Collection Period

Show entire document

Leave a Comment