\[\begin{array}{l} \begin{array} {lll } &£000\\ \text {Current assets}&15,000\\ \text {Non-current assets}&35,000\\ \text {Nan-currentliability barrawings}&18,000\\ \text {Equity}&20,000\\ \text {Current partion of lang-term aorrowings}&2,000\\ \text {Other non-current and current liabilities}&10,000\\ \end{array} \end{array}\] Based on the above figures, what is the gearing ratio?

A) 40% B) 90% C) 100% D) 150% A) 40% B) 90% C) 100% D) 150% C

Goggle Limited has the following figures in its statement of profit or loss for the year ended 31 October 2021 \[\begin{array}{l} \begin{array} {lll } &£\\ \text {Grass profit}&84,000\\ \text {Administration expenses}&24,000\\ \text {Bank overdraft interest}&600\\ \text {bank laan interest}&2,400\\ \text {Selling and distribution casts}&21,000\\ \text {Prafit before taxatian}&36,000\\ \text {Taxation}&9,000\\ \end{array} \end{array}\] Based on the above figures, what is Goggle Limited's interest cover ratio for the year ended 31 October 2021?

A) 9 times B) 12 times C) 13 times D) 15 times A) 9 times B) 12 times C) 13 times D) 15 times C

\[\begin{array}{l} \begin{array} {lll } &£\\ \text {Trade payales}&40,000\\ \text {Trade receivales}&45,000\\ \text {cash and cash equivalents}&15,000\\ \text {Taxation parale}&20,000\\ \text {The partion af lang-term barrawings repayable}&15,000\\ \text {15,000 within 12 manths of the year end date}\\ \text {Irvertory}&20,000\\ \end{array} \end{array}\] Based on the above figures, what is the quick ratio?

A) 0.80:1 B) 1:1 C) 1.07:1 D) 1.25:1 A) 0.80:1 B) 1:1 C) 1.07:1 D) 1.25:1

\[\begin{array}{l} \begin{array} {lll } &£000\\ \text {Sales}&15,000\\ \text {Grass Prafit}&5,000\\ \text {Operating Prafit}&3,000\\ \text {Finance Expense}&500\\ \text {Profit Elofore Taxation}&2,500\\ \end{array} \end{array}\] Based on the above figures, what is the interest cover ratio?

A) 3 times B) 5 times C) 6 times D) 10 times A) 3 times B) 5 times C) 6 times D) 10 times

\[\begin{array}{l} \begin{array} {lll } &£\\ \text {Trade receivales}&72,00\\ \text {prepayments}&30,000\\ \text {Cash sales}&328,500\\ \text {Credit sales}&547,500\\ \end{array} \end{array}\] Based on the above figures, what are the receivables days?

A) 30.00 days B) 42.50 days C) 48.00 days D) 68.00 days A) 30.00 days B) 42.50 days C) 48.00 days D) 68.00 days

\[\begin{array}{l} \begin{array} {lll } &£\\ \text {Opening irventory}&5,400\\ \text {Trade payales}&9,000\\ \text {Purchases (all an credit)}&45,000\\ \text {Glasing irventary}&7,200\\ \end{array} \end{array}\] Based on the above figures, what are the inventory days?

A) 45.63 days B) 58.40 days C) 60.83 days D) 76.04 days A) 45.63 days B) 58.40 days C) 60.83 days D) 76.04 days

Odessa Limited has the following profit figures in its statement of profit or loss for its latest year of trading: \[\begin{array}{l} \begin{array} {lll } &£\\ \text {Gross profit}&500,000\\ \text {Operating profit}&125,000\\ \text {Profit befare tax}&105,000\\ \text {Profit far the year}&85,000\\ \end{array} \end{array}\] The company has interest cover of 5 times. Based on these figures, what is Odessa Limited's finance expense for the year?

A) £100,000 B) £25,000 C) £21,000 D) £17,000 A) £100,000 B) £25,000 C) £21,000 D) £17,000

\[\begin{array}{l} \begin{array} {lll } &£\\ \text {Inentory }&6,000\\ \text {Payables }&12,000\\ \text { Receivables}&11,000\\ \text {Non-currentliabilities }&16,000\\ \text {Current portion of long-term borrowings }&3,000\\ \text {Cash }&1,000\\ \text {Taxation payable }&5,000\\ \end{array} \end{array}\] Based on the above figures, what is the current ratio?

A) 0.50:1 B) 0.60:1 C) 0.75:1 D) 0.90:1 A) 0.50:1 B) 0.60:1 C) 0.75:1 D) 0.90:1

\[\begin{array}{l} \begin{array} {lll } &£\\ \text {Trade payales}&35,000\\ \text {Trade receivales}&28,000\\ \text {cash and cash equivalents}&15,000\\ \text {Taxation repayale to the campary}&12,000\\ \text {Inventory}&14,000\\ \text {Accruals}&6,000\\ \end{array} \end{array}\] Based on the above figures, what is the quick ratio?

A) 0.81:1 B) 1.05:1 C) 1.34:1 D) 1.68:1 A) 0.81:1 B) 1.05:1 C) 1.34:1 D) 1.68:1

Smyrna Limited has the following liabilities in its statement of financial position: \[\begin{array}{l} \begin{array} {lll } &£000\\ \text {bank loan due for repayment in 3 years' time }&150\\ \text {bond payment due in 6 months' time}&50\\ \end{array} \end{array}\] The company has a gearing % of 50%. Based on these figures, what is Smyrna Limited's equity?

A) £75,000 B) £100,000 C) £300,000 D) £400,000 A) £75,000 B) £100,000 C) £300,000 D) £400,000

\[\begin{array}{l} \begin{array} {lll } &£000\\ \text {Inentory}&1,800\\ \text {Trade payales}&3,780\\ \text {Trade receizales}&4,050\\ \text {sales}&49,275\\ \text {Cost of sales}&32,850\\ \end{array} \end{array}\] Based on the above figures, what are the payables days?

A) 20 days B) 28 days C) 30 days D) 42 days A) 20 days B) 28 days C) 30 days D) 42 days

\[\begin{array}{l} \begin{array} {lll } &£\\ \text {Trade payales}&15,000\\ \text {Taxation payable}&10,000\\ \text {cash purchases}&28,750\\ \text {Credit purchases}&121,250\\ \end{array} \end{array}\] Based on the above figures, what are the payables days?

A) 36.50 days B) 45.15 days C) 60.83 days D) 75.26 days A) 36.50 days B) 45.15 days C) 60.83 days D) 75.26 days

\[\begin{array}{l} \begin{array} {lll } &£\\ \text {Trade payales}&35,000\\ \text {Trade receivales}&28,000\\ \text {cash and cash equivalents}&15,000\\ \text {Taxation payale}&12,000\\ \text {Prepayments}&4,000\\ \text {Inventory}&14,000\\ \text {Accuals}&6,000\\\end{array} \end{array}\] Based on the above figures, what is the current ratio?

A) 1.15:1 B) 1.21:1 C) 1.24:1 D) 1.30:1 A) 1.15:1 B) 1.21:1 C) 1.24:1 D) 1.30:1

Bunye Limited has the following balances in the statement of financial position at 31 December 2021. \[\begin{array}{l} \begin{array} {lll } &£\\ \text {Praperty, plant and equipment}&423,000\\ \text {Trade payables}&88,000\\ \text {Retained earnings}&186,000\\ \text {Earrawings (all nan-current liabilities)}&150,000\\ \text {Inentory}&29,000\\ \text {bank overdraft}&4,200\\ \text {Trade and ather receivables}&57,500\\ \text {Taxation payable}&18,800\\ \text {Nan-current asset irvestments}&22,500\\ \text {share iapital}&35,000\\ \text {Share premium}&50,000\\ \end{array} \end{array}\] Based on the above figures, what is the debt ratio?

A) 0.34:1 B) 0.49 C) 0.57 D) 2.04:1 A) 0.34:1 B) 0.49 C) 0.57 D) 2.04:1

\[\begin{array}{l} \begin{array} {lll } &£000\\ \text {Nan-current assets}&22,000\\ \text {current assets}&12,000\\ \text {Equity}&14,000\\ \text {Nan-Eurrentliabilities}&10,00\\ \text {Current liabilities}&10,000\\ \end{array} \end{array}\] Based on the above figures, what is the debt ratio?

A) 0.45:1 B) 0.59:1 C) 0.70:1 D) 0.83:1 A) 0.45:1 B) 0.59:1 C) 0.70:1 D) 0.83:1

\[\begin{array}{l} \begin{array} {lll } &£\\ \text {Inentory}&63,700\\ \text {Trade payables}&50,960\\ \text {Trade receivales}&114,400\\ \text {Rewenue}&949,000\\ \text {Cost of sales}&664,300\\ \end{array} \end{array}\] Based on the above figures, what are the receivables days?

A) 19.60 days B) 28.00 days C) 35.00 days D) 44.00 days A) 19.60 days B) 28.00 days C) 35.00 days D) 44.00 days

Exam 6: Ratio Analysis 2: Liquidity, Working Capital, and Long-Term Financial Stability

At 31 December 2021, Martha Limited has inventory of £48,000, trade payables of £68,000, cash at the bank of £22,000, trade receivables of £81,000, cash in hand of £1,000 and current tax payable of £15,000. Martha Limited also has a loan of £60,000 which is due for repayment by 5 annual instalments commencing on 30 June 2022. What is Martha Limited's current ratio?

Free

(Multiple Choice)

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Question 1

Correct Answer:

Verified

C

£000 Current assets 15,000 Non-current assets 35,000 Nan-currentliability barrawings 18,000 Equity 20,000 Current partion of lang-term aorrowings 2,000 Other non-current and current liabilities 10,000 Based on the above figures, what is the gearing ratio?

Free

(Multiple Choice)

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(41)

Question 2

Correct Answer:

Verified

C

Goggle Limited has the following figures in its statement of profit or loss for the year ended 31 October 2021 £ Grass profit 84,000 Administration expenses 24,000 Bank overdraft interest 600 bank laan interest 2,400 Selling and distribution casts 21,000 Prafit before taxatian 36,000 Taxation 9,000 Based on the above figures, what is Goggle Limited's interest cover ratio for the year ended 31 October 2021?

Free

(Multiple Choice)

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(34)

Question 3

Correct Answer:

Verified

C

£ Trade payales 40,000 Trade receivales 45,000 cash and cash equivalents 15,000 Taxation parale 20,000 The partion af lang-term barrawings repayable 15,000 15,000 within 12 manths of the year end date Irvertory 20,000 Based on the above figures, what is the quick ratio?

(Multiple Choice)

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Question 4

£000 Sales 15,000 Grass Prafit 5,000 Operating Prafit 3,000 Finance Expense 500 Profit Elofore Taxation 2,500 Based on the above figures, what is the interest cover ratio?

(Multiple Choice)

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Question 5

Zoe Limited has a cash conversion cycle of 30 days, receivables days of 40 and payables days of 20. What is Zoe Limited's inventory days figure?

(Multiple Choice)

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Question 6

£ Trade receivales 72,00 prepayments 30,000 Cash sales 328,500 Credit sales 547,500 Based on the above figures, what are the receivables days?

(Multiple Choice)

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Question 7

£ Opening irventory 5,400 Trade payales 9,000 Purchases (all an credit) 45,000 Glasing irventary 7,200 Based on the above figures, what are the inventory days?

(Multiple Choice)

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Question 8

Odessa Limited has the following profit figures in its statement of profit or loss for its latest year of trading: £ Gross profit 500,000 Operating profit 125,000 Profit befare tax 105,000 Profit far the year 85,000 The company has interest cover of 5 times. Based on these figures, what is Odessa Limited's finance expense for the year?

(Multiple Choice)

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Question 9

£ Inentory 6,000 Payables 12,000 Receivables 11,000 Non-currentliabilities 16,000 Current portion of long-term borrowings 3,000 Cash 1,000 Taxation payable 5,000 Based on the above figures, what is the current ratio?

(Multiple Choice)

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Question 10

£ Trade payales 35,000 Trade receivales 28,000 cash and cash equivalents 15,000 Taxation repayale to the campary 12,000 Inventory 14,000 Accruals 6,000 Based on the above figures, what is the quick ratio?

(Multiple Choice)

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Question 11

Smyrna Limited has the following liabilities in its statement of financial position: £000 bank loan due for repayment in 3 years' time 150 bond payment due in 6 months' time 50 The company has a gearing % of 50%. Based on these figures, what is Smyrna Limited's equity?

(Multiple Choice)

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Question 12

£000 Inentory 1,800 Trade payales 3,780 Trade receizales 4,050 sales 49,275 Cost of sales 32,850 Based on the above figures, what are the payables days?

(Multiple Choice)

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Question 13

£ Trade payales 15,000 Taxation payable 10,000 cash purchases 28,750 Credit purchases 121,250 Based on the above figures, what are the payables days?

(Multiple Choice)

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Question 14

£ Trade payales 35,000 Trade receivales 28,000 cash and cash equivalents 15,000 Taxation payale 12,000 Prepayments 4,000 Inventory 14,000 Accuals 6,000 Based on the above figures, what is the current ratio?

(Multiple Choice)

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Question 15

Different types of businesses have different cash flow cycles. Which of the following statements describe the cash flow cycle of retailers and which describe the cash flow cycle of manufacturers?

(Multiple Choice)

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Question 16

Bunye Limited has the following balances in the statement of financial position at 31 December 2021. £ Praperty, plant and equipment 423,000 Trade payables 88,000 Retained earnings 186,000 Earrawings (all nan-current liabilities) 150,000 Inentory 29,000 bank overdraft 4,200 Trade and ather receivables 57,500 Taxation payable 18,800 Nan-current asset irvestments 22,500 share iapital 35,000 Share premium 50,000 Based on the above figures, what is the debt ratio?

(Multiple Choice)

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Question 17

£000 Nan-current assets 22,000 current assets 12,000 Equity 14,000 Nan-Eurrentliabilities 10,00 Current liabilities 10,000 Based on the above figures, what is the debt ratio?

(Multiple Choice)

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Question 18

£ Inentory 63,700 Trade payables 50,960 Trade receivales 114,400 Rewenue 949,000 Cost of sales 664,300 Based on the above figures, what are the receivables days?

(Multiple Choice)

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Question 19

At 31 October 2021, Tasha Limited has inventory of £60,000, trade payables of £80,000, cash at the bank of £24,500, trade receivables of £88,000, cash in hand of £2,500 and current tax payable of £20,000. Tasha Limited also has a loan of £125,000 which is due for repayment by 5 equal annual instalments commencing on 30 September 2022. What is Tasha Limited's quick ratio?

(Multiple Choice)

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Question 20

£000 Current assets 15,000 Non-current assets 35,000 Nan-currentliability barrawings 18,000 Equity 20,000 Current partion of lang-term aorrowings 2,000 Other non-current and current liabilities 10,000 Based on the above figures, what is the gearing ratio?

£ Trade payales 40,000 Trade receivales 45,000 cash and cash equivalents 15,000 Taxation parale 20,000 The partion af lang-term barrawings repayable 15,000 15,000 within 12 manths of the year end date Irvertory 20,000 Based on the above figures, what is the quick ratio?

£000 Sales 15,000 Grass Prafit 5,000 Operating Prafit 3,000 Finance Expense 500 Profit Elofore Taxation 2,500 Based on the above figures, what is the interest cover ratio?

Zoe Limited has a cash conversion cycle of 30 days, receivables days of 40 and payables days of 20. What is Zoe Limited's inventory days figure?

£ Trade receivales 72,00 prepayments 30,000 Cash sales 328,500 Credit sales 547,500 Based on the above figures, what are the receivables days?

£ Opening irventory 5,400 Trade payales 9,000 Purchases (all an credit) 45,000 Glasing irventary 7,200 Based on the above figures, what are the inventory days?

£ Inentory 6,000 Payables 12,000 Receivables 11,000 Non-currentliabilities 16,000 Current portion of long-term borrowings 3,000 Cash 1,000 Taxation payable 5,000 Based on the above figures, what is the current ratio?

£ Trade payales 35,000 Trade receivales 28,000 cash and cash equivalents 15,000 Taxation repayale to the campary 12,000 Inventory 14,000 Accruals 6,000 Based on the above figures, what is the quick ratio?

Smyrna Limited has the following liabilities in its statement of financial position: £000 bank loan due for repayment in 3 years' time 150 bond payment due in 6 months' time 50 The company has a gearing % of 50%. Based on these figures, what is Smyrna Limited's equity?

£000 Inentory 1,800 Trade payales 3,780 Trade receizales 4,050 sales 49,275 Cost of sales 32,850 Based on the above figures, what are the payables days?

£ Trade payales 15,000 Taxation payable 10,000 cash purchases 28,750 Credit purchases 121,250 Based on the above figures, what are the payables days?

£ Trade payales 35,000 Trade receivales 28,000 cash and cash equivalents 15,000 Taxation payale 12,000 Prepayments 4,000 Inventory 14,000 Accuals 6,000 Based on the above figures, what is the current ratio?

Different types of businesses have different cash flow cycles. Which of the following statements describe the cash flow cycle of retailers and which describe the cash flow cycle of manufacturers?

£000 Nan-current assets 22,000 current assets 12,000 Equity 14,000 Nan-Eurrentliabilities 10,00 Current liabilities 10,000 Based on the above figures, what is the debt ratio?

£ Inentory 63,700 Trade payables 50,960 Trade receivales 114,400 Rewenue 949,000 Cost of sales 664,300 Based on the above figures, what are the receivables days?

Introduction, and the Statement of Financial Position

The Statement of Profit or Loss

Double-Entry Bookkeeping 1: Debits, Credits, T-Accounts, the Trial Balance, and the Financial Statements

Double-Entry Bookkeeping 2: Books of Prime Entry, Accounting Systems, and the Statement of Cash Flows

Ratio Analysis 1: Profitability, Eef ficiency, and Performance, and the Financing of Business

Cost and Management Accounting in Context

Product Costing: Absorption Costing

Relevant Costs Marginal Costing, and Short-Term Decision Making

Standard Costing and Variance Analysis

Process Costing

Capital Investment Appraisal, and Corporate Governance and Sustainability

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