Grade 11

Principles of Accounts

Standardized piece II

Name: __________________________________________________

Pool: _________________________________________________

Teacher: ______________________________________________

1. A summary of the financial statements for S. Christie Ltd is presented below.

S. Christie Ltd Trading and Profit and Loss Account

For year ended April 30, 2018
$ $

Sales 35,000

Opening inventory 2 500

Add purchases 26, 750

29, 250

Less closing stock 3,000 26, 250

8, 750

Expenses 3, 550

Net profit 5, 200

 S. Christie Ltd
Balance Sheet
As at April 30, 2018
$ $

Fixed Asset 525

Current Asset

Inventory 3 000

Debtor 3 450

Bank 1 000

7 450

Current Liabilities

Creditors 275 7 175

Total Net Assets 7 700

Capital 5 000

Add net profit 5 200

10 200

Less drawings 2 500

Owner’s Equity 7 700

Use the above financial statements for S. Christie Ltd to calculate the
following profitability and financial ratios: (Show workings).

a. Gross profit margin

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b. Current Ratio

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c. Acid test (Quick) ratio

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d. Stock turnover
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e. Net Profit Margin (%)

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Total 10 marks

2. Explain the difference between profitability and liquidity ratios?

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(4 marks)

3. Identify ONE (1) liquidity ratio.

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(1 mark)

(Total 15 marks)