Question

Question 1: Ratio Analysis Confused Aussie Trading Limited, a company listed on the Unintelligent Stock Exchange, is a trading and investment entity. The company trades exclusively in running equipment and invests in property and other firms. You are considering investing into Confused Aussie Trading Limited. The company has provided you the financial statements (i.e., income statement and balance sheet) for 2022, 2023 and 2023. Sales Revenue Cost of Goods Sold Gross Profit S162,349,000.00 75,937,000.00 $86,412,000.00 S151,765,000.00 84,972,000.00 S66,793,000.00 S181,546,000.00 $89,752,000.00 S91,794,000.00 Selling and Distribution Expenses Administrative Expenses Other Income Gain (Loss) on Sale of Land Gain (Loss) Sale of Equipment Impairment Loss Operating Profit S25,369,000.00 S10,538,000.00 S21,050,000.00 S12,861,000.00 $4,891,000.00 $7,200,000.00 $72,325,000.00 S31,598,000.00 $14,001,000.00 S15,605,000.00 0.00 $15,489,000.00 0.00 2,310,000.00 S30,175,000.00 S15,089,000.00 S10,578,000.00 0.00 S0.00 $2,000,000,00 S55,108,000.00 Finance Income Finance Costs Finance Costs (Net) 2,453,000.00 $14,890,000.00 $12,437,000.00 $2,453,000.00 $14,890,000,00 $12,437,000.00 4,505,000.00 S11,540,000.00 $7,035,000.00 Share of Net Gain (Loss) from Associates Share of Net Gain (Loss) from Joint Venture 4,287,000.00 $15,069,000.00 $4,287,000.00 $25,069,000.00 S12,542,000.00 $5,891,000,00 Profit Before Income Tax Income Tax Profit After Tax 49,106,000.00 S12,276,500.00 $36,829,500.00 $20,483,000.00 0.00 S54,724,000.00 S13,681,000.00 ,483,000.00 S41.043,000.00

Part B is hint to answer a,b,c,d

Answer 1

a. Effeciency ratios

Receivables turnover - The ratio of the company has declined from 7.723 in 2023 to 6.932 in 2024. It is also less from market and industry. So the liquidity of the company is decreasing

Inventory turnover - In 2023 the ratio of the company is 4.277 which is less than the industry rate but more than the company rate. In 2024 the ratio of the company is 3.1053 which is less than the market and industry. So the inventory system is quite avearge.

So the effeciency ratio of the company is good but decline from market and industry.

b. Liquidity ratios

Current ratio - The company's current ratio is very low to the market and itndustry rate and even the normal ratio which is required. Hence the company's liquidity is not in good condition.

Liquidity/Quick ratio - The company's quick ratio is very low to the market and itndustry rate and even the normal ratio which is required. Hence the company's liquidity is not in good condition.

c.Solvency ratio

Solvency ratio in 2023 would be negative and in 2024 it is positive but very low as compared to the market and industry rates. Hence the solvency of the company is in dillema and not at a good position.

d.Profitability ratio

Profitability of the company in 2023 would be negative.only and in 2024 it would be low. It is very less as compared to the market and industry rates. Hence the profitabilityof the company is not at a good position.