ASSETS

ITEM CASH OTHER CURRENT ASSETS FIXED ASSETS

1 -£ 295,000 £ 10,000 Stock of materials
2 -£ 15,000
£ 670,000 £ 35,000 Debtors and work in progress
4 -£ 345,000
6 -£ 20,000
5 -£ 95,000 £ 100,000
9 -£ 50,000 £ 50,000
£ 150,000

£ 20,000
£ 40,000 £ 45,000 £ 130,000
£ 40,000 £ 45,000 £ 130,000
 CLAIMS
FIXED ASSETS LIABILITY EQUITY CAPITAL
≡ £ 5,000 Creditors (materials) -£ 290,000
≡ -£ 15,000
£ 705,000
≡ £ 5,000 Accruals -£ 350,000
Plant and Equipment ≡ -£ 20,000
Plant and Equipment ≡ £ 5,000 Creditors (Plant)
Land and Buildings ≡
≡ £ 150,000
≡ £ 15,000 Taxation -£ 15,000
≡ £ 7,500 Dividends -£ 7,500
≡ £ 20,000
£ 37,500 £ 177,500
£ 37,500 £ 177,500
CLAIMS
EQUITY CAPITAL
Purchases (materials)
Opening Stock
Sales
Wages and salaries
Depreciation Operating Expenses -£ 370,000

Capital

General Reserve
 Amount Amount Amount
Fixed Assets
Land and Buildings £ 50,000
Plant and Equipment £ 80,000
Total Fixed Assets (net book value) £ 130,000

Current Assets
Stock of materials £ 10,000
Work in progress £ 10,000
Debtors £ 25,000
Cash in bank £ 40,000
Total Current Assets £ 85,000

Less Current Liabilities

Creditors (Materials) £ 5,000
Creditors (Plant) £ 5,000
Accruals (W & S) £ 5,000
Taxation £ 15,000
Proposed Dividends £ 7,500
Total Current Liabilities -£ 37,500

Net Current Assets £ 47,500

Total Asset Less Current Liabilities £ 177,500

Financed by

Capital and Reserves

Ordinary Share Capital £ 150,000
General Reserve £ 20,000
Profit & Loss Account £ 7,500
£ 177,500
Profit And Loss Account
January 1st - December 31st

Sales £ 705,000
Less Cost of Sales:
Opening Stock -£ 15,000
plus Purchases -£ 300,000
Stock Available for sale -£ 315,000
minus Closing Stock £ 10,000 -£ 305,000
Gross Profit £ 400,000

Less Operating Expenses:

Depreciation -£ 20,000
Wages -£ 250,000
Salaries -£ 100,000 -£ 370,000

Operating Profit £ 30,000

Less interest

Net Profit before tax £ 30,000

Taxation (50%) -£ 15,000

Profit after Tax £ 15,000

Dividends (50%) £ 7,500

Retained Profit £ 7,500

Cash flow statement for the year ending 31 december 2014

Cash inflows
Sales 670,000
Total Cash Inflow 670,000

Cash outflows
Materials 295,000
Plant and Equipment 95,000
Wages and salaries 345,000
Total Cash Outflow 735,000

Net Cash inflow - 65,000

PROFITABILITY RATIOS

Gross Profit Margin = Gross Profit / Sales x 100 56.74%

Mark-up = Gross Profits / Cost of Sales x 100 131%

Return on Net Assets (Return on Capital Employed):

Net Proft before Interest and Tax / Share capital and reserves x 100

Return on Equity (return on Shareholder's funds):

Net Profit after Interest and Tax / Chare capital and reserves x 100

Net Profit Margin (Operating Profit Margin)

Net profit beofre interest and tax / Sales x 100

ACTIVITY RATIOS

Net Asset Turnover Sales / Net Assets x 100 3.97

Stock Holding Period Stock held / Stock Used x 365 12

Debtor Collection Period Trade Debtors / Credit Sales x 365 13

Creditor Payment Period Trade Creditors / Credit Purchases x 365 12

LIQUIDITY RATIOS

Current Ratio Current Assets / Current liabilities 2.27

Liquid Ratio Liquid Assets / Current liabilities 1.07

CAPITAL GEARING RATIOS

Debt Equity Ratio Borrowings (long and short term) / Equity (Shares plus Reserves) x 10

Times Interest Covered Profit before interest and tax / Interest Charges x 100
INVESTORS RATIO

Earnings per Share (EPS) Profit after Interest and Tax / Number of ordinary shares x 100

Dividend Cover Earnings per Share / Dividends per share 10 p per share / 5 p per sh

Price Earnings Ratio Current Share price / EPS

Dividend Yield Dividend per share / Current Share Price

ital and reserves x 100 16.90%

al and reserves x 100 8.45%

4.26%

times

days

days

days

hares plus Reserves) x 100 0

#DIV/0!
 10%

p per share / 5 p per share 2