Financial Accounting Practice Question Paper

Question 1

(a)

|Ratio |Industry average 20X8 |Actual 20X8 |
|Net working capital |$125,000 |$63,300 |
|Current Ratio |2.35 |1.84 |
|Quick Ratio |.87 |.75 |
|Inventory turnovers |4.55 |5.61 |
|Average collection periods |35.3 days |20.46 days |
|Total asset turnover |1.09 |1.47 |
|Debt ratio |.300 |.55 |
|Time interest earned ratio |12.3 |8 |
|Gross profit margin |20.2% |23.3% |
|Net profit margin |9.1% |7.17% |
|Return on total assets(ROA) |9.9% |10.53% |
|Return on equity(ROE) |16.7% |23.5% |
|Earnings per share(EPS) |$3.10