Question

Cumi Ltd. and Ciki Ltd. are both computer component manufacturers in Longford. You are provided with the following summarized information in relation to both companies. Income statements for year ended 31 March 2018 Cumi Lid. Cik Lid. AED'000 AED'000 Revenue 1.500 2000 Cost of sales 1.000 1.600 Gross profit 500 Operating expenses 150 200 Operating profit 350 200 Interest on debentures 100 50 Profit before tak 250 Tax SO Profit after tax 200 Dividends 70 Retained profits 350 30 120 100 Balance sheets as at 31 March 2018 Cumi Ltd. AED'000 AED'000 CINILI AED'000 AED'000 Non-current assets Machinery at cost Less Depreciation 4.000 1000 3.000 4.830 3.500 1.330 Buildings at cost Less Depreciation 3.000 1.140 1,860 1,600 Motors vehicles at cost 800 Less Depreciation 350 5.310 2990 Current Assets Inventory Trade receivables Bank 350 5.860 700 3.680 Equity and Liabilities Issued equity shares Retained carings 3,000 1.600 4.600 2,000 550 2.550 Non-current liabilities 10% Debentures 1,000 Current liabilities Dividends Bank overdraft Trade payables 260 5.860 630 3.680

Answer 1

i) Return on Capital employed = Net Income / Total Assets
Cumi Ltd = 200/5860 = 3.41%
Ciki Ltd = 120/3680 = 3.26%

ii) Gross Profit Margin = Gross Profit / Sales
Cumi Ltd = 500/1500 = 33.33%
Ciki Ltd = 400/2000 = 20%

iii) Profit Margin = Net Income / Sales
Cumi Ltd = 200/1500 = 13.33%
Ciki Ltd = 120/2000 = 6%

iv) Current Ratio = Current Assets / Current Liabilities
Cumi Ltd = 550/260 = 2.12
Ciki Ltd = 700/630 = 1.11

v) Acid test ratio = (Receivable+Bank) / Current Liabilities
Cumi Ltd = (160+240)/260 = 1.54
Ciki Ltd = (370+0)/630 = 0.59

As per HOMEWORKLIB RULES we are suppose to answer 4 parts, i have answered 5, so kindly post others separately