Intro to Finance
Submitted by: Submitted by deanlai
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Category: Business and Industry
Date Submitted: 07/06/2011 07:33 AM
Introduction to Finance
[A]. Calculate ratios for Chester for the year ended 30 September 2009 equivalent to those calculated for the year ended 30 September 2008. (Showing working)
1. Return on Capital Employed (ROCE)
[Profit before interest and tax over total asset less current liabilities]
ROCE = Profit before interest & tax * 100
Total assets – Current liabilities
= RM16, 000,000 * 100
RM258, 000,000 – RM44, 000,000
= 7.48 %
2. Net assets [equal to capital employed] turnover
= Turnover
Total asset – current liabilities
= RM250, 000,000
RM258, 000,000 – RM44, 000,000
= 1.17 %
3. Net profit [before tax] margin
= Net profit * 100
Sales
= RM16, 000,000 * 100
RM250, 000,000
= 6.4 %
4. Current Ratio
= Current asset
Current liabilities
= RM38, 000,000
RM44, 000,000 , = 0.86: 1
5. Closing inventory holding period [time]
= Closing inventory * 365 days
Cost of goods sold
= RM25, 000,000 * 365 days
RM200, 000,000
= 46 days
6. Trade receivables’ collection period [in days]
= Trade debtors * 365days
Annual credit sales
= RM13, 000,000 * 365 days
RM250, 000,000
= 19 days
7. Trade payables’ payment period (based on cost of sales) [in days]
= Trade creditors * 365 days
Cost of sales
= RM23, 000,000 * 365 days
RM200, 000,000
= 42 days
8. Gearing (debt over debt plus equity)
= Debts...
