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Assessment Task 1 Finals

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63 views4 pages

Assessment Task 1 Finals

Uploaded by

glizahimmoldang
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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ASSESSMENT TASK SHEET

BUSINESS AND MANAGEMENT


COLLEGE

1st Term; Academic Year 2024-2025

Course Code: CBME 311


Course Title: FINANCIAL ANALYSIS AND REPORTING
Assessment Task: Ratio Analysis __________
(Total Score)
Student’s Name: (Highest Possible Score)
Program and Year Level: BSBA Fin Man 3
Date of Examination:

Problem 1
Using the following information, prepare and complete the statement of financial position given below:
1. Total debt to equity is 1:2
2. Total assets turnover is 2
3. Gross profit on sales is 30%
4. Average collection period is 40 days (assume 360 days in a year)
5. Inventory turnover ratio based on cost of goods sold and year-end inventory is 3
6. Acid-test ratio is 0.75

ABC Company
Statement of Financial Position
As of March 31, 2024
Assets Liabilities and Shareholder’s Equity
Cash P 41,667 Accounts Payable P 500,000
Accounts receivable 333,333 Common Shares 400,000
Inventory 700,000 Share premium 200,000
Property, plant and equipment 425,000 Retained earnings 400,000
Total assets P1,500,000 Total Liab and Shareholder’s Equity P1,500,000

Solution:
Total debt to equity Total Assets Turnover = Net Sales
1:2 = Total debt: P1,000,000 Average Assets
2 Total debt = P1,000,000 2 = Net Sales
2 2 P1,500,000
Total debt = P500,000 Net Sales = P3,000,000

Total assets = Total debt + Total Equity Gross Profit Margin = Gross Profit
= P500,000 + P1,000,000 Net Sales
Total assets = P1,500,000 30% = Gross Profit
P3,000,000
Gross Profit = P700,000

Average Collection Period = 360 days


Receivable Turnover Cost of Sales = Sales – Gross Profit
40 days = 360 days = P3 M – P700,000
Receivable Turnover Cost of Sales = P2,100,000
40 ARTO = 360
40 40
Accounts receivable turnover = 9 times
Inventory turnover = Cost of goods sold Receivable Turnover = Net sales
Average Inventory Average Receivable
3 = P2,100,000 9 = P3,000,000
Average Inventory Receivable
3 Inventory = P2,100,000 9 Receivable = P3,000,000
3 3 9 9
Inventory = P700,000 Receivable = P333,333

Acid test ratio = Quick Assets Total assets P1,500,000


Current Liabilities Less: Quick assets 375,000
.75 = Quick assets Inventory 700,000
P500,0000 Property, plant & Eqpt P 425,000
Quick Assets = P375,000

Quick Assets = Cash + Accounts receivable


P375,000 = Cash + P333,333
Cash = P41,667

Problem 2
The following information was extracted from the statement of financial position as of
December 31, 2023 of Waga Company, a company newly listed on the Philippine Stock Exchange.
Total non-current assets P50,000,000
Closing inventories 5,000,000

A financial analysis is interest in investing in the company. Computed the following ratios in
respect of the company for the year ended December 31, 2023.
Gross profit margin 25% Net profit margin 20%
Cash ratio 40% Equity to current liabilities 50%
Accounts receivable turnover 5 times Inventory turnover ratio 10 times
Non-current assets is to equity 5:4
Non-current assets is to total current assets 5:7

You are required to prepare:


1. The statement of financial position as at December 31, 2023. The only current assets are
cash, accounts receivables, inventory and prepaid insurance while current liabilities only
include accounts payable.
2. Statement of profit or loss for the year ended December 31, 2023.

Solution
Noncurrent assets to Equity Noncurrent assets to Current assets
5: 4 = P50,000,000 : Equity 5: 7 = P50,000,000 : Current assets
P50,000,000 (4) = 5 Equity P50,000,000 (7) = 5 Current assets
P200,000,000 = 5 Equity P350,000,000 = 5 Current assets
5 5 5 5
Equity = P40,000,000 Current assets = P70,000,000

Equity to Current liabilities Total assets = Noncurrent + Current


50% = P40,000,000 = P50,000,000 + P70,000,000
Current liabilities Total assets = P120,000,000
.5Current liabilities = P40,000,000 Total Liab. & Equity = Liabilities + Equity
.5 .5 P120,000,000 = Liabilities + P40,000,000
Current liabilities = P80,000,000 Liabilities = P80,000,000
Inventory turnover = Cost of goods sold Receivable Turnover = P66,666,667
Average Inventory Average Receivable
10 = Cost of goods sold 5 = P66,666,667
P5,000,000 Receivable
Cost of goods sold = P5,000,000 (10) 5 Receivable = P66,666,667
Cost of goods sold = P50,000,000 5 5
Receivable = P13,333,333
Gross Profit Margin = Sales – Cost of goods sold
25% = 100% - Cost of goods sold
Cost of goods sold = 75%

Sales = P50,000,000
75%
Sales = P66,666,667

Net Profit Margin = Gross Profit – Operating Expenses


20% = 25% - OPEX
Operating Expenses = 5%
Operating Expenses = Sales x 5%
= P66,666,667 x 5%
Operating Expenses = P3,333,334

Cash ratio = Cash


Current Liabilities
40% = Cash
P80,000,000
Cash = P32,000,000

Statement of Profit or Loss


Sales P66,666,667
Cost of Sales 50,000,000
Gross Profit P16,666,667
Operating Expenses 3,333,334
Net Profit P13,333,333

Statement of Financial Position


Assets
Current assets
Cash P32,000,000
Accounts receivable 13,333,333
Inventory 5,000,000
Prepaid insurance 19,666,667 P 70,000,000
Noncurrent assets 50,000,000
Total Assets P120,000,000

Liabilities and Shareholder’s Equity


Liabilities
Current Liabilities
Accounts payable P 80,000,000
Equity 40,000,000
Total Liabilities and Shareholder’s Equity P120,000,000
Instructor’s / Professor’s Feedback:

__________________
Instructor’s / Professor’s Signature

Conforme: _________________
Learner’s Signature

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