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School of Business & Tourism : Accounting for Business - Accounting Assignment
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Internal Code - MAS1459
Additional information
1. The balances of certain accounts at the beginning of the year are:
Accounts receivable (gross) $157 500
Allowance for doubtful debts (14 175)
Inventories 110 250
2. Total assets and total equity at the beginning of the year were $387,500 and $190, 500 respectively.
3. Income tax expense for the year was $31,500. Net finance expenses were $3150.
Questions :
Based on the information provided above, identify and calculate the principal ratios that a financial analyst might use that would give some indication of the following:
a. the entity’s earning ability; (4 ratios are required)
b. the extent to which internal sources have been used to finance asset acquisitions; (1 ratio is required)
c. the rapidity with which accounts receivable are collected; (1 ratio is required)
d. the ability of the entity to meet unexpected demands for working capital; (1 ratio is required)
e. the length of time taken by the entity to sell its inventories. (1 ratio is required)
Accounting Assignment
The following financial statements were prepared for the management of TEDA Ltd. The statements contain some information that will be disclosed in Additional Information at the end of the general purpose financial statements.
Additional information
1. The balances of certain accounts at the beginning of the year are:
Accounts receivable (gross) $157 500
Allowance for doubtful debts (14 175)
Inventories 110 250
2. Total assets and total equity at the beginning of the year were $387,500 and $190, 500 respectively.
3. Income tax expense for the year was $31,500. Net finance expenses were $3150.
Questions :
Based on the information provided above, identify and calculate the principal ratios that a financial analyst might use that would give some indication of the following:
a. the entity’s earning ability; (4 ratios are required)
b. the extent to which internal sources have been used to finance asset acquisitions; (1 ratio is required)
c. the rapidity with which accounts receivable are collected; (1 ratio is required)
d. the ability of the entity to meet unexpected demands for working capital; (1 ratio is required)
e. the length of time taken by the entity to sell its inventories. (1 ratio is required)