Some of the key ratios for Montrose plc and its main competitor Arbroath plc are as...
Some of the key ratios for Montrose plc and its main competitor Arbroath plc are as follows:
| Montrose | Arbroath | |
| Gearing | 90% | 10% |
| ROCE | 30% | 15% |
| Gross Profit | 40% | 50% |
| Trade receivables days | 5 days | 55 days |
| Trade payables days | 30 days | 30 days |
Use the ratios above to assess the financial performance and financial position of the two companies.
Homework Answers
Ans. (i) Montrose plc is equity based company as its Gearing is 90%. On the other hand, Arbroath plc is debt-oriented company as its gearing is 10%.
(ii) Since Arbroath plc is debt-oriented company, its interest cost will be greater as compared to Montrose plc.
(iii) Gross Profit of Arbrouth plc is greater than Montrose plc. However due to its high interest cost, the ROCE is less as compared to that of Montrose plc.
(iv) The working capital requirement of Montrose plc is less as compared to Arbrouth plc because of its less Trade Receivables day.
Add Answer to:
Some of the key ratios for Montrose plc and its main competitor
Arbroath plc are as...
Executive Cars PLC have produced their Annual Report and Accounts for the year to 31 December...
Executive Cars PLC have produced their Annual Report and Accounts for the year to 31 December 2018 Statement of Profit or Loss 2018 2017 K'000 K, 000 Turnover 8,304 7,465 Cost of sales 6.462) (5.778) Gross profit 1,842 1,687 Distribution costs (206) (197) Administrative expenses (568) (412) Operating profit 1,068 1,078 Income from investments 135 Profit before tax 1,208 1,213 Taxation (374) (337) Profit after tax 834 876 Dividends (172) (241) 140 Retained profit 662 635 Statement of financial position...
Both Alison plc and Barbara plc operate wholesale electrical stores throughout the UK. The financial statements of each...
Both Alison plc and Barbara plc
operate wholesale electrical stores throughout the UK. The
financial statements of each business for the year ended 30 June
2016 are as follows
Statement of Financial
Position as at 30 June 2016
Statement of Profit and Loss for the
year ended 30 June 2016
Note: All purchases and sales were on
credit.
a）For each business, calculate two
ratios that are concerned with each of the following aspects (eight
ratios in a total of each...
The accountant of Maypole plc has just completed the financial reports for the year ended 31st...
The accountant of Maypole plc has just completed the financial reports for the year ended 31st December 2017. The Financial Director has asked for a report to be prepared to enable the Board of Directors to get a clear picture of the performance and financial position of the company. The company produces only one product and it is sold worldwide. (a) Discuss the performance over the period from 2015 to 2017 and the financial position at the end of each...
Your Team is part of the new intake of trainee consultants working for Marlyn Plc, one...
Your Team is part of the new intake of trainee consultants working for Marlyn Plc, one of the world’s leading financial consultancies. A senior consultancy team has been assigned to this project, but it has been decided to allow your trainee group to shadow the consultancy team for work experience purposes. Your Team’s task focuses on the evaluation of a packaging and distribution company, Wy-Post Ltd, and making an evidenced case to clients as to whether they should or should...
QUESTION 4 GANYO plc has embarked on a programme of growth through acquisitions and has identified...
QUESTION 4 GANYO plc has embarked on a programme of growth through acquisitions and has identified Alpha Ltd and Beta Ltd as companies in the same industrial sector, as potential targets. Using recent financial statement of both Alpha and Beta and further information obtained from a trade association, GANYO plc has managed to build up the following comparability table Industrial Alpha Beta average Profitabilitv ratios ROCE before tax % Return on equity % Net profit margin % Gross profit margin...
As an appointed Auditor, the company has provided you with following financial ratios for the year....
As an appointed Auditor, the company has provided you with following financial ratios for the year. Mobile X Ltd. Financial ratios Ratio Actual Budget (expected) Gross profit percentage 40% 45% Net profit percentage 25% 40% Trade payables ratio 70 days 30 days Current ratio 1.35:1 1.40:1 Acid test ratio 0.85:1 0.80:1 The company’s year end is the 31st March 2020. The auditor compared the planned and actual ratios for the company. Complete the table to indicate which ratios should be...
Tailoka's summarized financial statements for the year ended 31 March 2019 are sol out below K...
Tailoka's summarized financial statements for the year ended 31 March 2019 are sol out below K million 4,000 (3,450) 550 (370) 40 180 Statement of Profit Or Loss Revenue (25% cash sales) Cost of sales Gross profit Operating experises Profit on disposal of plant Finance charges Profit before tax Income tax expense Profit for the period Dividend paid Retained profit for the year (20) 200 (50) 150 50 100 K'million K million 550 Statement of Financial Position Non-current assets Property,...
You have recently been appointed as assistant to the financial controller of Frank plc, a manufacturing...
You have recently been appointed as assistant to the financial
controller of Frank plc, a manufacturing company. He has asked you
to help with the finalisation of the financial statements for the
year ended 31 December 2018 and year ended 31 December 2019.
(a) The Key Financial Information for Frank plc for the last two years are as follows: Year 2018 Year 2019 Cash £30,000 £20,000 Accounts Receivables 200,000 260,000 Inventory 400,000 480,000 Property, Plant and Equipment 800,000 800,000 Total...
Question 2 Frankfurt Limited and Madrid Limited are both engaged in retailing, but they seem to...
Question 2 Frankfurt Limited and Madrid Limited are both engaged in retailing, but they seem to take a different approach to it according to the following information: Frankfurt Madrid Ltd Ltd 20% 17% 17% 30% 18% 63 days 21 days Return on capital employed (ROCE) Return on ordinary shareholders' funds (ROSF) Average settlement period for trade receivables Average settlement period for trade payables Gross Profit margin Operating profit margin Average inventories turnover period 50 days 45 days 40% 15% 10%...
Question 2 Two companies Samsong Sdn Bhd and Huaway Sdn Bhd trade in the same market....
Question 2 Two companies Samsong Sdn Bhd and Huaway Sdn Bhd trade in the same market. Their financial statements for the year ended 30 September 2019 are summarised below: Statements of Comprehensive Income for the year ended 30 September 2019: Samsong Huaway RM'000 RM'000 Revenue 284 405 (155) (251) 129 154 Cost of sales Gross profit Administrative Distribution Depreciation Interest on loan (24) (35) (37) (53) (12) (9) Nil (5) Profit before tax 61 47 Income tax expense (10) (4)...
Executive Cars PLC have produced their Annual Report and Accounts for the year to 31 December 2018 Statement of Profit or Loss 2018 2017 K'000 K, 000 Turnover 8,304 7,465 Cost of sales 6.462) (5.778) Gross profit 1,842 1,687 Distribution costs (206) (197) Administrative expenses (568) (412) Operating profit 1,068 1,078 Income from investments 135 Profit before tax 1,208 1,213 Taxation (374) (337) Profit after tax 834 876 Dividends (172) (241) 140 Retained profit 662 635 Statement of financial position...
Both Alison plc and Barbara plc
operate wholesale electrical stores throughout the UK. The
financial statements of each business for the year ended 30 June
2016 are as follows
Statement of Financial
Position as at 30 June 2016
Statement of Profit and Loss for the
year ended 30 June 2016
Note: All purchases and sales were on
credit.
a）For each business, calculate two
ratios that are concerned with each of the following aspects (eight
ratios in a total of each...
QUESTION 4 GANYO plc has embarked on a programme of growth through acquisitions and has identified Alpha Ltd and Beta Ltd as companies in the same industrial sector, as potential targets. Using recent financial statement of both Alpha and Beta and further information obtained from a trade association, GANYO plc has managed to build up the following comparability table Industrial Alpha Beta average Profitabilitv ratios ROCE before tax % Return on equity % Net profit margin % Gross profit margin...
Tailoka's summarized financial statements for the year ended 31 March 2019 are sol out below K million 4,000 (3,450) 550 (370) 40 180 Statement of Profit Or Loss Revenue (25% cash sales) Cost of sales Gross profit Operating experises Profit on disposal of plant Finance charges Profit before tax Income tax expense Profit for the period Dividend paid Retained profit for the year (20) 200 (50) 150 50 100 K'million K million 550 Statement of Financial Position Non-current assets Property,...
You have recently been appointed as assistant to the financial
controller of Frank plc, a manufacturing company. He has asked you
to help with the finalisation of the financial statements for the
year ended 31 December 2018 and year ended 31 December 2019.
(a) The Key Financial Information for Frank plc for the last two years are as follows: Year 2018 Year 2019 Cash £30,000 £20,000 Accounts Receivables 200,000 260,000 Inventory 400,000 480,000 Property, Plant and Equipment 800,000 800,000 Total...
Question 2 Frankfurt Limited and Madrid Limited are both engaged in retailing, but they seem to take a different approach to it according to the following information: Frankfurt Madrid Ltd Ltd 20% 17% 17% 30% 18% 63 days 21 days Return on capital employed (ROCE) Return on ordinary shareholders' funds (ROSF) Average settlement period for trade receivables Average settlement period for trade payables Gross Profit margin Operating profit margin Average inventories turnover period 50 days 45 days 40% 15% 10%...
Question 2 Two companies Samsong Sdn Bhd and Huaway Sdn Bhd trade in the same market. Their financial statements for the year ended 30 September 2019 are summarised below: Statements of Comprehensive Income for the year ended 30 September 2019: Samsong Huaway RM'000 RM'000 Revenue 284 405 (155) (251) 129 154 Cost of sales Gross profit Administrative Distribution Depreciation Interest on loan (24) (35) (37) (53) (12) (9) Nil (5) Profit before tax 61 47 Income tax expense (10) (4)...
Most questions answered within 3 hours.
-
Suppose that on a temperature scale X, water boils at 203.0°X
and freezes at -105.7°X. What...
asked 43 minutes ago -
BaS crystallizes in a cubic unit cell with S2- ions on each
corner and each face....
asked 1 hour ago -
A. 0≤P(Oi)≤10≤P(Oi)≤1 for each i
B. P(Oi)≤0P(Oi)≤0
C. P(Oi)=1+P(OCi)P(Oi)=1+P(OiC)
D. P(Oi)≥1P(Oi)≥1
If an experiment consists of...
asked 2 hours ago -
A battery has an emf of 9.20V and an internal resistance of 1.20
ohm. a)What resistance...
asked 2 hours ago -
The area of an elastic circular loop decreases at a constant
rate, dA/dt = −6.60×10−3 m2/s...
asked 3 hours ago -
The denaturation of proteins can be described by the
equilibrium
F⇌U
where F and U represent...
asked 5 hours ago -
Please answer what the maximum and minimum force is, and the
angle on the ion is...
asked 5 hours ago -
implement a program that reads a number of rows and a symbol.
The program will draw...
asked 5 hours ago -
Assume that when adults with smartphones are randomly selected,
45% use them in meetings or classes....
asked 5 hours ago -
Determine the number of formula units of
Na2SO4 and moles of oxygen contained in 8.11
moles...
asked 5 hours ago -
Explain in steps on the following code
What would be the output when executed
using System;...
asked 5 hours ago -
Given the information in the table, which of the following
statements is CORRECT?
Stock A
Stock...
asked 5 hours ago