Cooks & Cleans Limited Ratio Analysis Case Study - Accounting Assignment Help

Assignment Task

Question 1

A.Identify and discuss the benefits and limitations of Ratio analysis.
B.In your own words explain the difference between Horizontal analysis and Vertical analysis

Question 2

You have been provided with a summary of the Profit & Loss data and Balance Sheet data for the past three years for Cooks & Cleans Limited (CCL). CCL are a home handy service that are called into people’s homes to cook and clean for them. CCL uses their own ingredients and cleaning equipment which is managed under a Periodic Inventory System.In the past three years CCL have invested significant funds into marketing both in print and online to increase their customer base and therefore boost income. They are wanting to employ more staff to ensure they are able to meet the demand when the expected demand for their services increase.

Cooks & Cleans Limited

• Profit and Loss Statement
• 20X7 20X6 20X5
• Sales income
• Cooking & Cleaning Income 187,718 188,189 177,743
• Total Income
• Less Cost of Goods Sold
• Opening Inventory 628 562 210
• Purchases – Ingredients &
• Cleaning Supplies 10,895 20,365 15,585
• Less Closing Inventory (345) (628) (562)
• Cost of Goods Sold 11,178 20,299 15,233
• Gross profit 176,540 167,890 162,510
• Other Income
• Interest income 472 588 510
• Dividend income 6,900 4,890 5,970
• Total Income 183,912 173,368 168,990
• Expenses
• General administration expenses 2,036 1,850 1,069
• Advertising 17,890 16,400 10,540
• Wages 128,280 115,450 113,600
• Printing, postage & stationery 263 204 198
• Telephone 2,388 1,788 1,512
• Rent 13,520 13,000 11,960
• Vehicle expenses 4,978 3,669 3,458
• Total Expenses 169,355 152,361 142,337
• Net Profit Before Tax 14,557 21,007 26,653
• Less Taxation Expense (30%) 4,367 6,302 7,996
• Net Profit After Tax 10,190 14,705 18,65

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