calculate the accounting Ratios of a company and calculate Income statement and Balance sheet

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timer Asked: Dec 21st, 2018
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All questions required to be answer specifically are attached in the document. the course work should follow harvard referencing if possible and appicable.

Question 1. Understanding Financial Statements & Ratio Analysis Dhofar Poultry Company SAOG Calculate the following accounting Ratios of Dhofar Poultry Company SAOG for years 2017 and 2016 and write your comments on company’s performance in year 2017 compared to year 2016. Use below format Ratio Gross Profit Ratio 2017 25% 2016 Comments 20% Ratio is improved due to increased Profit and profit is increased due increased sales and decrease in expenses Use following formulas to calculate Ratios 1. Gross Profit Ratio Gross Profit/Salesx100 2. Net Profit Ratio Net profit/SalesX100 3. Return on capital Employed Net profit/Equity X100 4. Current Ratio Current Asset/Current liabilities 5. Quick ratio Current Asset-Stock/Current liabilities 6. Stock turnover days Stock/Cost of Goods Sold*365 7. Debtors Collection period Receivables/sales X 365 8. Payment period Payable/Cost of Sales X 365 Please download Dhofar Poultry Company SAOG audited financials (Comprehensive income statement and Statement of Financial Position 2017 (Balance sheet) from Muscat Security Market (MSM) website. following is the link. https://www.msm2.gov.om/ Either click on the link or copy & past to your browser Please note files to download Please select the file “Audited Financial Statement for year 2017”, English version 1. DPC comprehensive income 17.pdf 2. DPC Financial position17.pdf Please answer following questions from Audited Financial of Dhofar Poultry Company SAOG 1. In 2017, what is the total resources of the Company (Total Assets) and how is it is financed from owners and outsiders ? 2. In 2017, Balance sheet (statement of Financial Position) shows accumulated loss of RO 811,364. What it means? 3. How much is the Total loan amount payable to bank for the year 2017 (include short term payable and long term payable) 4. Write your comments on company’s Financial results and Financial Position for the year 2017 as compared to year 2016 Question 2. Following balances were extracted from Salam LLC books of Accounts as at December 2016. Assume this is the First accounting year of the company. Account head Capital Cash Payables Dr Cr RO RO - 28,000 45,300 - - 61,600 Motor Vehicle 21,500 Receivables 38,500 Bank loan 62,500 Office expenses 1,000 Printing and Stationery 1,250 Vehicle expenses 750 Repairs and Maintenance 695 Insurance 275 Advertisement 725 Bad debts Function expenses Building Purchases Employee cost - 1,500 765 96,000 - 115,400 - 22,500 Interest expenses 3,550 Utility Expense 3,500 Sales Total - 201,110 353,210 353,210 Assume depreciation to building @ 10% per annum and Motor Vehicle 15%. Provide Income tax @ 12% after RO 30,000 basic exemption limit Prepare Salam LLC’s 1. Income statement 2. Balance sheet (statement financial position) Sample Question and Answer on Income statement and Balance sheet Following balances were extracted from Marhaba LLC books of accounts as at December 2017. Assume this is the First accounting year of the company. Account head Capital Cash Payables Dr Cr RO RO - 22,000 92,300 - - 60,600 Motor Vehicle 20,500 Receivables 28,500 Bank loan 61,500 Office expenses 2,000 Printing and Stationery 1,350 Vehicle expenses 850 Repairs and Maintenance 685 Insurance 175 Advertisement 825 Bad debts Function expenses Building Purchases Employee cost - 1,400 565 86,000 - 125,400 - 21,500 Interest expenses 2,550 Utility Expense 1,500 Sales Total - 242,000 386,100 386,100 Assume depreciation to building @ 15% per annum and Motor Vehicle 10%. Provide Income tax @ 12% after RO 30,000 basic exemption limit Prepare Marhaba LLC’s 1. Income statement 2. Balance sheet (statement financial position) Answer to Sample Question Profit and loss Statement as on 31st December 2017 Marhaba LLC Sales Less: purchase Gross profit Less: Expenses Office expenses Printing and Stationery Vehicle expenses Repairs and Maintenance Insurance Advertisement Bad debts Function expenses Employee cost Interest expenses Utility Expense Total Expenses Net profit before Tax and depreciation Depreciation Building Depreciation Motor Vehicle Net Profit after Depreciation Less Income Tax (71,550-30000)*12% Profit After Tax 242,000 125,400 116,600 2,000 1,350 850 685 175 825 1,400 565 21,500 2,550 1,500 33,400 83,200 12,900 2,050 68,250 4590 63,660 Balance sheet as at 31st December 2017 marhaba LLC Fixed assets Building ( after depreciation) Motor Vehicle (after depreciation) Total Fixed Assets Current assets Receivables Cash Total Current Assets Total Assets current liabilities Payables Tax payable Bank Loan Total Current Liabilities Capital Net profit for the year Total Liabilities and Equity 73,100 18,450 91,550 28,500 92,300 120,800 212,350 60,600 4,590 61,500 126,690 22,000 63,660 212,350

Tutor Answer

Missfomen
School: Purdue University

Attached.

1

FINANCIAL ANALYSIS OF DHOFAR POULTRY COMPANY SAOG

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2
FINANCIAL ANALYSIS OF DHOFAR POULTRY COMPANY SAOG
Question 1
Calculation of the Ratios
Gross Profit Ratio
Gross Profit/Sales * 100
2017: 1,623,153/10,108,324 * 100 = 16%
2016: 1,756,460/9,828,443 * 100 = 17.9%
Net Profit Ratio
Net Profit/Sales * 100
2017: 114,644/10,108,324 * 100= 1.13%
2016: 375,690/9,828,443 * 100 = 3.82%
Return on Capital Employed
Net profit/Equity * 100
2017: 114,644/3,547,019 * 100= 3.23%
2016: 375,690/3,432,375 * 100 = 10.95%
Current Ratio
Current Asset/Current Liabilities
2017: 7,072,858/9,074,937 = 0.78
2016: 6,064,808/8,170,703 = 0.74
Quick Ratio
Current Asset – Stock/Current liabilities
2017: 7,072,858 – 3,065,601/9,074,937 = 0.44
2016: 6,064,808 – 2,880,695/8,170,703 = 0.39

3
Stock turnover days
Stock/Cost of Goods Sold * 365
2017: 3,065,601/8,485,171 * 365 = 131.87 days
2016: 2,880,695/8,071,983 * 365 = 130.26 days
Debtors Collection period
Receivables/ Sales * 365
2017: 3,977,959/10,108,324 * 365 = 143.64 days
2016: 3,162,170/9,828,443 * 365 = 117.43 days
Payment period
Payable/Cost of Sales * 365
2017: 3,379,974/8,485,171 * 36...

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Anonymous
Good stuff. Would use again.

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