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Analysis And Interpretation of Financial Statements Assignment
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Assignment Task
Simulation
Following are the extracted information from the Income Statement and Balance Sheet for the year ending December 2020 of ZXY Pty Ltd.
Income Statement for the year ending December 2020
|
Sales revenue |
1,650,000 |
|
Less: Cost of sales |
1,000,000 |
|
Gross profit |
650,000 |
|
Add other income |
25,000 |
|
Less: Operating expenses |
325,000 |
|
Profit before tax (EBIT) |
350,000 |
|
Less: Income tax |
100,000 |
|
Net Profit (Loss) after tax (EAT) |
250,000 |
Balance Sheet as at 31 December 2020
|
2020 ($) |
2019 ($) |
|
|
Cash |
60,000 |
40,000 |
|
Accounts receivable (debtors) |
40,000 |
90,000 |
|
Inventory |
130,000 |
70,000 |
|
Prepaid expenses |
25,000 |
15,000 |
|
Building |
80,000 |
50,000 |
|
Land |
150,000 |
100,000 |
|
Accounts payable |
80,000 |
40,000 |
|
Accrued expenses |
20,000 |
10,000 |
|
Income tax payable |
100,000 |
90,000 |
|
150,000 |
100,000 |
|
Equity (Balancing Amount) |
135,000 |
125,000 |
You are required to calculate and interpret the following ratios (Instructions: You need to write the formulas; modify the amount, calculate the ratios using average amount of balance sheet, and interpret the meaning of the computed value of each ratio. You can calculate in excel but must submit in word file):
- Return on Assets (ROA)
- Assets Turnover
- Days inventory ratio
- Days debtors’ ratio
- Inventory turnover
- Debtors’ turnover
- Current Ratio (CR)
- Quick Ratio (QR)
- Debt to Equity Ratio (DE)
- Gross Profit Margin (GPM)
This Financial Analysis has been solved by our PhD Experts at My Uni Paper.