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Acc Project Assingment

The document provides financial statement ratios for The Beauty Enterprise for the years ending 30 June 2020 and 30 June 2021. It includes calculations for current ratio, acid-test ratio, gross profit margin, net profit margin, return on investment, inventory turnover ratio, and average collection period for both years. The ratios are then interpreted, comparing liquidity, profitability, and efficiency between the two years.

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NIK ABDUL AIMAN HAKEM
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22 views8 pages

Acc Project Assingment

The document provides financial statement ratios for The Beauty Enterprise for the years ending 30 June 2020 and 30 June 2021. It includes calculations for current ratio, acid-test ratio, gross profit margin, net profit margin, return on investment, inventory turnover ratio, and average collection period for both years. The ratios are then interpreted, comparing liquidity, profitability, and efficiency between the two years.

Uploaded by

NIK ABDUL AIMAN HAKEM
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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COURSE CODE

INTRODUCTION TO FINANCIAL ACCOUNTING AND REPORTING (ACC106)

PROGRAMME

CODE/GROUP HM110/THM1102BA

ASSIGNMENT

FINANCIAL STATEMENT ANALYSIS

LECTURE NAME

MERANI CHE ALI

Name Metric id
UWAIS DANIAL BIN MAZLAN 2021111827
NURUL SYAZWANI BINTI PAUZI 2021111859
NURUL SYUHADA BINTI ZULKOFLI 2021107423
SOFEA ILYANA BINTI ZAWAWI 2021109367
Table of content

No. Particulars Marks


1. a. Calculate for both years: 30
i. Current ratio
ii. Acid-test ratio
iii. Gross profit margin
iv. Net profit margin
v. Return on investment
vi. Inventory turnover ratio
vii. Average collection period
2. b. Interpret each of the ratios for both years. 14
3. c. Compare and contrast the liquidity ratios, profitability ratios and efficiency ratios 6
for both years.
A) Calculate for both years:
i. Current Ratio

30 JUNE 2020 30 JUNE 2021

Current Asset: RM130, 135 Current Asset: RM198, 620


Current Liability: RM83,700 Current Liability: RM65, 900

RM130,135 / RM83,700 RM198,620 / RM65,900

= 1.55 : 1 = 3.01 : 1

‘
ii. Acid-test Ratio

30 JUNE 2020 30 JUNE 2021

Current Asset: RM130,135 Current Asset: RM198,620


Inventory: RM48,800 Inventory: RM66,000
Prepayment: RM2,750 Prepayment: RM2,300
Current Liability: RM83,700 Current Liability: RM65,900

(RM130,135 - RM48,800 - RM2,750) / (RM298,620 - RM66,000 – RM2,300) /


RM83,700 RM65,900

= 0.94 : 1 = 1.98 : 1

iii. Gross Profit Margin

30 JUNE 2020 30 JUNE 2021

Gross Profit: RM120,150 Gross Profit: RM113,680


Sales: RM295,000 Sales: RM334,750

(RM120,150 / RM295,000) x 100 (RM113,680 / RM334,750) x 100

=40.73% =33.96%
iv. Net Profit Margin

30 JUNE 2020 30 JUNE 2021

Net Profit: RM100,880 Net Profit: RM78,910


Total Asset: RM410,580 Total Asset: RM490,370
Current Liability: RM83,700 Current Liability: RM65,900

[RM100,880 / (RM410,580 – RM83,700)] [RM78,910 / (RM470,710 – RM65,900)]


x 100 x 100

=30.86% =19.49%

v. Return On Invesment

30 JUNE 2020 30 JUNE 2021

PROFIT AVAILABLE TO INVESTMENT


PROFIT AVAILABLE TO INVESTMENT
AVERAGE INVESTMENT EQUITY AVERAGE INVESTMENT EQUITY

RM100,880 RM78,910
= = X 100
X 100
RM226,880 RM304,810
0.26
= 44% = 26%
vi. Inventory Turnover Ratio

30 JUNE 2020 30 JUNE 2021

COST OF GOODS SOLD


COST OF GOODS SOLD
AVERAGE INVENTORY
AVERAGE INVENTORY

207,050 267,440
= =
48,800 66,000

= 4.24 times = 4.05 times

vii. Average Collection Period

30 JUNE 2020 30 JUNE 2021

(RM57,550 / RM278,400) x 365 (RM67,071 / RM315,120) x 365

=75.45 Days =77.69 Days


b. Interpret each of the ratios for both years.
Year 2020
Current Ratio = Total Current Ratio
Total Current Liability
= RM130135
RM83700
= 1.55
It happened that every ringgit that the business debt,has its RM1.55 of currents assest to
pay for.

Quick Ratio = Currents Assest-Inventory-Prepaid Expenses


Current Liabilities

= RM130135 - RM48800
RM83700
=0.97
It shows that every ringgit that the business have debt, RM43 it has RM0.97 to pay for.

Gross Profit Margin= Gross Profit (100)


Net Sales
=120150(100)
278400
=43.15%
Every RM100 sales made by the business, RM43.15 was occurred before any expenses
happened.

Net profit margin=net profit (100)


net sales
=100880 (100)
278400
=36.23%
Every RM100 of sales made by the business, RM36.23 of the net profit was happened.
Average collection period= accounts recievable(365)
Credit sales
=57500 (365)
194880
=107.69=108 DAYS
The Beauty Enterprise replace its inventory 4 times on years.

Return Of Investment = Net Profit (100)


Cost Investment

= 78190 (100)
20000
=397
Return invesment in the year of 2020 much better than in 2021 which the value is of the
2020 ratio is 504 while in year of 2021 is 395 .

Year 2021
current ratio = total current asset
total current liabilities

=198620
65900

=2.01: 1

It shows that every business debt it was RM2.01 of currents asset to pay for it.
Gross profit margin= gross profit (100)
net sales

=113680 (100)
315120
=36.07%

Every RM100 of sales made by the business, RM36.07 was occurred before any expenses
were made.

Net profit margin= Net profit (100)


Net sales

=78910 (100)
315120

=25.04%

For every RM100 of sales made by business RM25.04 of net profit were occurred

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