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Perform Financial Calculation Assignment

The document provides information and instructions for calculating various financial ratios and depreciation expenses using different methods. It includes data for calculating current ratio, quick ratio, liquid ratio, debt-equity ratio, total assets to debt ratio, proprietary ratio, debt to capital employed ratio, interest coverage ratio, inventory turnover ratio, and breakeven points. It also provides asset values and usage details to calculate depreciation expenses using straight-line, double declining balance, sum-of-years digits, and production capacity methods. The document contains multiple examples demonstrating calculation of financial ratios and depreciation allocation for assets over their useful lives.

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Biruk Habtamu
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24 views

Perform Financial Calculation Assignment

The document provides information and instructions for calculating various financial ratios and depreciation expenses using different methods. It includes data for calculating current ratio, quick ratio, liquid ratio, debt-equity ratio, total assets to debt ratio, proprietary ratio, debt to capital employed ratio, interest coverage ratio, inventory turnover ratio, and breakeven points. It also provides asset values and usage details to calculate depreciation expenses using straight-line, double declining balance, sum-of-years digits, and production capacity methods. The document contains multiple examples demonstrating calculation of financial ratios and depreciation allocation for assets over their useful lives.

Uploaded by

Biruk Habtamu
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 9

1.

Calculate Current and quick ratio from the following information:

Items Amount
Inventories Br 50,000
Trade receivables 50,000

Advance tax 4,000

Cash and cash equivalents 30,000


Trade payables 100,000
Short-term borrowings (bank overdraft) 4,000

2. Calculate ‘Liquid Ratio’ from the following information:

Current liabilities = Br 150,000

Current assets = 90,000

Inventories = 20,000

Advance tax = 5,000

Prepaid expenses = 5,000

3. Calculate the current ratio from the following information:


Total assets = Br 400,000
Non-current liabilities = 80,000
Shareholders’ Funds = 300,000
Non-Current Assets:
Fixed assets = Br. 190,000
Non-current Investments = 100,000
Illustration 9
4. From the following information, calculate Debt Equity Ratio, Total Assets to
Debt Ratio, Proprietary Ratio, and Debt to Capital Employed Ratio:

Balance Sheet as at March 31, 2017

Items Amount
I. Equity and Liabilities:
1. Shareholders’ funds

a) Share capital 600,000

b) Reserves and surplus 500,000

2. Non-current Liabilities

Long-term borrowings 200,000

3. Current Liabilities 100,000

II. Assets
1. Non-current Assets

a) Fixed assets 4,00,000 400,000

b) Non-current investments 700,000

2. Current Assets 300,000

5. From the following details, calculate interest coverage ratio: Net Profit after tax Rs.
60,000; 15% Long-term debt 10,00,000; and Tax rate 40%
6. From the following information, calculate inventory turnover ratio:
Inventory in the beginning = 18,000
Inventory at the end = 22,000
Net purchases = 46,000
Wages = 14,000
Revenue from operations = 80,000
Carriage inwards = 4,000
7. PL produces and sells two products. The M sells for Rs.7 per unit and has a total variable
cost of Rs.2.94 per unit, while the N sells for Rs.15 per unit and has a total variable cost
of Rs.4.5 per unit. The marketing department has estimated that for every five units of M
sold, one unit of N will be sold. The organization’s fixed costs total Rs.36,000.
Required: Calculate the breakeven point for PL.
8. Alpha manufactures and sells three products, the beta, the gamma and the delta. Relevant
information is as follows.
Beta per unit Gamma per unit Delta per
unit
Selling price Br. 135.00 Br. 165.00 Br.
220.00 Variable cost 73.50 58.90
146.20
Total fixed costs are Br.950,000.
An analysis of past trading patterns indicates that the products are sold in the ratio 3:4:5
Required: Calculate the breakeven point for Alpha.
9. assume that a machine is acquired at the beginning of 1991 for Br 100,000 and the
residual value of the machine at the end of 10 years of economic life is estimated at Br
10,000. Accounting Period ends on December 31.
Instruction: compute the amount of depreciation allocable to each year using
A. Straight Line Method
B. Double Declining Balance Method
C. Sum of Year Digit Method
10. CC Corporation purchased equipment on January 1, 2000 for Br 20000 which has an
expected life of 5 years and salvage value of Br 1,000. Accounting period of 2000 Ends
on December 31.
Instruction: calculate the declining balance rate and the amount of depreciation for its
useful life using DDB Method.
11. JK Company purchased old building on January 1, 1995 for Br 105,000 and its estimated
life is 4 years with a salvage value of Br 5,000 and the physical period ends on December
31, 1995. Instruction: determine the sum-of-years-digit and calculate the amount of
depreciation using SYDM for its useful life.
12. XY Company purchased diesel powered generator on January 1, 2000 at Br. 50,000 and
the generator has estimated economic life of 5 years or a production capacity of 500,000
machine hours with no residual value.
Instruction: calculate the depreciation expense for the year 2000 up to 2004 assuming
that the generator was used for 100, 000,120,000, 80,000, 150,000 and 50,000 machine
hours, for the year 2000,2001,2002,2003 and 2004 respectively.
13. GG Company purchases a delivery truck on April 13, 1991 for Br 180,400. The
expected life of the truck was 4 years or 200,000 KMs and has an estimated salvage value
of Br 6,400. During the year 1991,1992,1993,1994 and 1995 the truck was driven for
60,000 50,000,20,000,30,000,25,000 and 15,000 KMs, respectively. The company’s
fiscal period ends on December 31 of each year.
Instruction: Compute depreciation expense for its useful life under all the methods of
depreciation.

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