Question

I have already posted the question, however, only four parts have been answered with missing data, as well as not correct. Kindly, requesting you to help as much as possible. I have an exam and I need an explanation.

Problem! A mount. Assets 1.00.000 Goodwil Amount 60,000 Liabilities Equity shares of $ 10 each Rosoves 20.000 Ficed Assets at cost Profit and loss account Secured loan Sundry Creditors Provision for action 30,000 Stock 80,000 Sundry deblors 50.000 Advances 20.000 Cash 1.40.000 30.000 30.000 10.000 30,000 300 000 1 3.00.000 the sales for the year were 5.60.000, 80% ore in credit Opening Stock Debtors is 16.000 each Calculate la) debt-guity ratio Liquidatio c uentralipid Fredetto current assetsel fued assets turnover ratio of Debtors collection period la) Net Profit mwinthewing het netinin Answers 0 667 A. Debt-Equity Ratio: Debt Ratio = Totallibilities/Total Assets = 120 000 + 30.000 + 80,000 + 50 000 + 20.000l/100,000 - 200,000/300.000 = 2/1 Equity ratio a Total Equity/Total Assets = 100,000/ 300,000 = 1/3=0.333 ie. Debt-Equity Ratio - 0.667/0.333 = 2 B. Liquid Ratio - Quick Acid test Ratio (Q.) = Quick Assets (Q.A)/Current liabilities (C.L) = (Sundry Debtors 30K+ Advances 10K + Cash OK)/(Sundry Creditors SOK + Provision for Taxation 20K) = 70,000/70,000 = 1 C. Current Ratio: Current Assets (C.A) / Current liabilities(CL) = (Sundry Debtors 30K + Advances 10K + Cash 30K + Steek 2017(Sundry Creditors 30+ Provision for Taxation 20K) 100.000 / 70.000 = 1.42 D. Fixed Assetto Current Asset 140,000 (goodwill is not included intangible 100.000 = 1.4 FATR Sales/ Fixed Assets (FA) = 560,000/140,000 (goodwill is not included intangible) = 4 E F Debtor collection period=365 days/DTR Average Debtor (0.D+CD2= (30,000+ 36,000/2 = 23,000 OTR (Debit Tumover ratio = Credit sales / average debtor = 30 Debtor collection Period=363 / 19.48 = 18 days and 17 hours 360,000) / 23,000 18.48 G. Net Profit (NP) Margin = (Net profit or income / Sales) x 100 (NP is not given)

Answer 1

debt equity ratio	total liabilities / shareholders equity
total liabilities
provision for taxation	20000
sundry creditors	50000
secured loan	80000
total liabilities	150000
shareholders equity
equity shares	100000
reserves	20000
profit and loss account	30000
total shareholders equity	150000
debt equity ratio	1.00
quick ratio	quick assets / current liabilities
quick assets
cash	30000
advances	10000
debtors	30000
total quick assets	70000
current liabilities
provision for taxation	20000
sundry creditors	50000
total current liabilities	70000
quick ratio	1.00
current ratio	current assets / current liabilities
current assets
cash	30000
advances	10000
debtors	30000
stock	30000
total current assets	100000
current liabilities
provision for taxation	20000
sundry creditors	50000
total current liabilities	70000
current ratio	1.43
fixed assets to current assets	fixed assets / current assets
fixed assets	140000
total current assets	100000
fixed assets to current assets	1.40
fixed assets turnover ratio	sales / ending fixed assets
sales	560000
ending fixed assets	140000
fixed assets turnover ratio	4.00
debtors collection period	365 days / debtors turnover ratio
debtors turnover ratio	credit sales / average debtors
credit sales (80% of sales)	448000
opening debtors	16000
closing debtors	30000
average debtors	23000
debtors turnover ratio	19.48
debtors collection period	18.74
net profit margin	(net income / sales)*100
profit and loss account	30000
sales	560000
net profit margin	5.36%

For calculation of net profit margin as no direct amount was provided for net income, I have assumed the profit and loss account as net income and taken it into consideration while calculating.