F3 (FA/FFA) – Chapter 27 – PART H – CBE MCQs – ACCA

These are ACCA F3 (FA/FFA) Financial Accounting MCQs for Part-H of the Syllabus “Interpretation of financial statements”.

These multiple-choice questions (MCQs) are designed to help ACCA F3 students to better understand the exam format. We aim to instill in students the habit of practicing online for their CBE exams. By doing so, students can reduce exam stress and prepare more effectively.

Please note:

  • Students should not attempt these MCQs until they have finished the entire chapter.
  • All questions are compulsory, so please do not skip any.

We hope that these MCQs will be a valuable resource for students preparing for the ACCA F3 (FA/FFA) exam.

INFORMATION ABOUT THESE CBE MCQs Test/Quiz

Course:ACCA – Associations of Chartered Certified Accountants
Fundamental Level:Knowledge, FIA – Foundation in Accounting
Subject:Financial Accounting
Paper:F3 – FA/FFA
Chapter:Interpretation of financial statements
Chapter Number:27 of the Practice and Exam Kit
Syllabus Area:H – “Interpretation of financial statements”
Questions Type:CBE MCQs
Exam Section:Section A

Syllabus Area

These Multiple Choice Questions (MCQs) cover the Syllabus Area Part H of the Syllabus; “Interpretation of financial statements” of ACCA F3 (FA/FFA) Financial Accounting Module.

Time

These MCQs are not time-bound. Take your time and solve them without stress. Pay proper attention and focus. Do not rush or hesitate

Result

Students will get their F3 CBE MCQs Test results after they finish the entire test. They will also be able to see the correct and incorrect answers, as well as explanations for the incorrect questions.

Types of Questions

MCQs: Choose one from the given options.
Multiple choice: Choose all those answers which seem correct/ or incorrect to you, as per the requirement of the question. Keep your eye on the wording “( select all those which are correct/ or incorrect)“.
Drop-down: Select from the list provided.
Type numbers: Type your answer in numbers as per the requirement of the question.

 

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F3 - Chapter 27 - Part H - MCQs

Course: ACCA - FIA
Subject:
F3 (FA/FFA) Financial Accounting
Syllabus Area: H - Interpretation of financial statements
Chapter in Kit: 27 - Interpretation of financial statements
Exam Section: Section A
Questions type: MCQs
Time: No Time Limit

INSTRUCTIONS

  1. If you are using mobile, turn on the mobile rotation and solve the MCQs on wide screen for better experience.

REQUEST

  1. Please rate the quiz and give us feedback once you completed the quiz.
  2. Share with ACCA students on social media such as, Facebook Groups, Whatsapp, Telegram, etc.

1 / 23

Why is analysis of financial statements carried out?

2 / 23

A company has the following details extracted from its statement of financial position:

The industry the company operates in has a current ratio norm of 1.8. Companies who manage liquidity well in this industry have a current ratio lower than the norm.

Which of the following statements accurately describes the company's liquidity position?

3 / 23

A business operates on a gross profit margin of 331/ %. Gross profit on a sale was $800, and expenses were $680.

What is the net profit margin?

4 / 23

Which of the following is a ratio which is used to measure how much a business owes in relation to its size?

5 / 23

Quality Co is analysing its financial performance. An extract from its draft statement of financial position at 31 March 20X8 is set out below.

Note. The bank overdraft first occurred on 30 September 20X7.

In the analysis of the financial and liquidity position of Quality Co, its gearing, current and quick ratios are calculated.

What would be the Current Ratio of Quality Co.?

6 / 23

Quality Co is analysing its financial performance. An extract from its draft statement of financial position at 31 March 20X8 is set out below.

Note. The bank overdraft first occurred on 30 September 20X7.

In the analysis of the financial and liquidity position of Quality Co, its gearing, current and quick ratios are calculated.

What would be the Quick Ratio of Quality Co.?

7 / 23

Quality Co is analysing its financial performance. An extract from its draft statement of financial position at 31 March 20X8 is set out below.

Note. The bank overdraft first occurred on 30 September 20X7.

In the analysis of the financial and liquidity position of Quality Co, its gearing, current and quick ratios are calculated.

What would be the Gearing of Quality Co.?

You should calculate gearing using the capital employed (debt + equity) as the denominator.

8 / 23

From the following information regarding the year to 31 August 20X6, what is the accounts payable payment period? You should calculate the ratio using purchases as the denominator.

9 / 23

Which of the following transactions would result in an increase in capital employed?

10 / 23

A company's gross profit as a percentage of sales increased from 24% in the year ended 31 December 20X1 to 27% in the year ended 31 December 20X2.

Which of the following events is most likely to have caused the increase?

11 / 23

Which one of the following would help a company with high gearing to reduce its gearing ratio?

12 / 23

Two companies Binky and Smokey trade in the same market. Their financial statements for the year ended 31 October 20X6 are summarised below:

STATEMENTS OF PROFIT OR LOSS FOR THE YEAR ENDED 31 OCTOBER 20X6

Binkyβ€β€β€Ž β€Ž Smokeyβ€β€β€Ž β€Ž
$'000β€β€β€Ž β€Ž $'000β€β€β€Ž β€Ž
Sales revenue 284β€β€β€Ž β€Ž 305β€β€β€Ž β€Ž
Cost of sales (155) (151)
Gross profit β€β€β€Ž β€Žβ€β€β€Ž β€Ž129β€β€β€Ž β€Ž β€β€β€Ž β€Žβ€β€β€Ž β€Ž154β€β€β€Ž β€Ž
Expenses
β€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€ŽAdministrative (24) (37)
β€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€ŽSelling and distribution (35) (53)
β€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€ŽDepreciation (9) (12)
β€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€ŽLoan note interest (–) (5)
Net Profit β€β€β€Ž β€Žβ€β€β€Ž β€Ž61β€β€β€Ž β€Ž β€β€β€Ž β€Žβ€β€β€Ž β€Ž47β€β€β€Ž β€Ž

STATEMENTS OF FINANCIAL POSITION AS AT 31 OCTOBER 20X6

Binkyβ€β€β€Ž β€Ž Smokeyβ€β€β€Ž β€Ž
$'000β€β€β€Ž β€Ž $'000β€β€β€Ž β€Ž
Assets
Non-current assets
At cost 320β€β€β€Ž β€Ž 515β€β€β€Ž β€Ž
Accumulated depreciation (75) (96)
β€β€β€Ž β€Ž245β€β€β€Ž β€Ž β€β€β€Ž β€Ž419β€β€β€Ž β€Ž
Current assets
Inventory 91β€β€β€Ž β€Ž 293β€β€β€Ž β€Ž
Receivables 46β€β€β€Ž β€Ž 75β€β€β€Ž β€Ž
Bank 64β€β€β€Ž β€Ž 15β€β€β€Ž β€Ž
Total assets β€β€β€Ž β€Ž446β€β€β€Ž β€Ž β€β€β€Ž β€Ž802β€β€β€Ž β€Ž
Equity and liabilities
Equity
Share capital 150β€β€β€Ž β€Ž 250β€β€β€Ž β€Ž
Retained earnings 108β€β€β€Ž β€Ž 177β€β€β€Ž β€Ž
10% Loan note β€“β€β€β€Ž β€Ž 50β€β€β€Ž β€Ž
Current liabilities 188β€β€β€Ž β€Ž 325β€β€β€Ž β€Ž
Total equity and liabilities β€β€β€Ž β€Ž446β€β€β€Ž β€Ž β€β€β€Ž β€Ž802β€β€β€Ž β€Ž

TASK

What is the Gross Profit % of Binky? (upto one decimal place 00.0%)

13 / 23

Two companies Binky and Smokey trade in the same market. Their financial statements for the year ended 31 October 20X6 are summarised below:

STATEMENTS OF PROFIT OR LOSS FOR THE YEAR ENDED 31 OCTOBER 20X6

Binkyβ€β€β€Ž β€Ž Smokeyβ€β€β€Ž β€Ž
$'000β€β€β€Ž β€Ž $'000β€β€β€Ž β€Ž
Sales revenue 284β€β€β€Ž β€Ž 305β€β€β€Ž β€Ž
Cost of sales (155) (151)
Gross profit β€β€β€Ž β€Žβ€β€β€Ž β€Ž129β€β€β€Ž β€Ž β€β€β€Ž β€Žβ€β€β€Ž β€Ž154β€β€β€Ž β€Ž
Expenses
β€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€ŽAdministrative (24) (37)
β€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€ŽSelling and distribution (35) (53)
β€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€ŽDepreciation (9) (12)
β€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€ŽLoan note interest (–) (5)
Net Profit β€β€β€Ž β€Žβ€β€β€Ž β€Ž61β€β€β€Ž β€Ž β€β€β€Ž β€Žβ€β€β€Ž β€Ž47β€β€β€Ž β€Ž

STATEMENTS OF FINANCIAL POSITION AS AT 31 OCTOBER 20X6

Binkyβ€β€β€Ž β€Ž Smokeyβ€β€β€Ž β€Ž
$'000β€β€β€Ž β€Ž $'000β€β€β€Ž β€Ž
Assets
Non-current assets
At cost 320β€β€β€Ž β€Ž 515β€β€β€Ž β€Ž
Accumulated depreciation (75) (96)
β€β€β€Ž β€Ž245β€β€β€Ž β€Ž β€β€β€Ž β€Ž419β€β€β€Ž β€Ž
Current assets
Inventory 91β€β€β€Ž β€Ž 293β€β€β€Ž β€Ž
Receivables 46β€β€β€Ž β€Ž 75β€β€β€Ž β€Ž
Bank 64β€β€β€Ž β€Ž 15β€β€β€Ž β€Ž
Total assets β€β€β€Ž β€Ž446β€β€β€Ž β€Ž β€β€β€Ž β€Ž802β€β€β€Ž β€Ž
Equity and liabilities
Equity
Share capital 150β€β€β€Ž β€Ž 250β€β€β€Ž β€Ž
Retained earnings 108β€β€β€Ž β€Ž 177β€β€β€Ž β€Ž
10% Loan note β€“β€β€β€Ž β€Ž 50β€β€β€Ž β€Ž
Current liabilities 188β€β€β€Ž β€Ž 325β€β€β€Ž β€Ž
Total equity and liabilities β€β€β€Ž β€Ž446β€β€β€Ž β€Ž β€β€β€Ž β€Ž802β€β€β€Ž β€Ž

TASK

What is the Gross Profit % of Smokey? (upto one decimal place 00.0%)

14 / 23

Two companies Binky and Smokey trade in the same market. Their financial statements for the year ended 31 October 20X6 are summarised below:

STATEMENTS OF PROFIT OR LOSS FOR THE YEAR ENDED 31 OCTOBER 20X6

Binkyβ€β€β€Ž β€Ž Smokeyβ€β€β€Ž β€Ž
$'000β€β€β€Ž β€Ž $'000β€β€β€Ž β€Ž
Sales revenue 284β€β€β€Ž β€Ž 305β€β€β€Ž β€Ž
Cost of sales (155) (151)
Gross profit β€β€β€Ž β€Žβ€β€β€Ž β€Ž129β€β€β€Ž β€Ž β€β€β€Ž β€Žβ€β€β€Ž β€Ž154β€β€β€Ž β€Ž
Expenses
β€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€ŽAdministrative (24) (37)
β€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€ŽSelling and distribution (35) (53)
β€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€ŽDepreciation (9) (12)
β€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€ŽLoan note interest (–) (5)
Net Profit β€β€β€Ž β€Žβ€β€β€Ž β€Ž61β€β€β€Ž β€Ž β€β€β€Ž β€Žβ€β€β€Ž β€Ž47β€β€β€Ž β€Ž

STATEMENTS OF FINANCIAL POSITION AS AT 31 OCTOBER 20X6

Binkyβ€β€β€Ž β€Ž Smokeyβ€β€β€Ž β€Ž
$'000β€β€β€Ž β€Ž $'000β€β€β€Ž β€Ž
Assets
Non-current assets
At cost 320β€β€β€Ž β€Ž 515β€β€β€Ž β€Ž
Accumulated depreciation (75) (96)
β€β€β€Ž β€Ž245β€β€β€Ž β€Ž β€β€β€Ž β€Ž419β€β€β€Ž β€Ž
Current assets
Inventory 91β€β€β€Ž β€Ž 293β€β€β€Ž β€Ž
Receivables 46β€β€β€Ž β€Ž 75β€β€β€Ž β€Ž
Bank 64β€β€β€Ž β€Ž 15β€β€β€Ž β€Ž
Total assets β€β€β€Ž β€Ž446β€β€β€Ž β€Ž β€β€β€Ž β€Ž802β€β€β€Ž β€Ž
Equity and liabilities
Equity
Share capital 150β€β€β€Ž β€Ž 250β€β€β€Ž β€Ž
Retained earnings 108β€β€β€Ž β€Ž 177β€β€β€Ž β€Ž
10% Loan note β€“β€β€β€Ž β€Ž 50β€β€β€Ž β€Ž
Current liabilities 188β€β€β€Ž β€Ž 325β€β€β€Ž β€Ž
Total equity and liabilities β€β€β€Ž β€Ž446β€β€β€Ž β€Ž β€β€β€Ž β€Ž802β€β€β€Ž β€Ž

TASK

What is the Net Profit % of Binky? (upto one decimal place 00.0%)

15 / 23

Two companies Binky and Smokey trade in the same market. Their financial statements for the year ended 31 October 20X6 are summarised below:

STATEMENTS OF PROFIT OR LOSS FOR THE YEAR ENDED 31 OCTOBER 20X6

Binkyβ€β€β€Ž β€Ž Smokeyβ€β€β€Ž β€Ž
$'000β€β€β€Ž β€Ž $'000β€β€β€Ž β€Ž
Sales revenue 284β€β€β€Ž β€Ž 305β€β€β€Ž β€Ž
Cost of sales (155) (151)
Gross profit β€β€β€Ž β€Žβ€β€β€Ž β€Ž129β€β€β€Ž β€Ž β€β€β€Ž β€Žβ€β€β€Ž β€Ž154β€β€β€Ž β€Ž
Expenses
β€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€ŽAdministrative (24) (37)
β€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€ŽSelling and distribution (35) (53)
β€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€ŽDepreciation (9) (12)
β€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€ŽLoan note interest (–) (5)
Net Profit β€β€β€Ž β€Žβ€β€β€Ž β€Ž61β€β€β€Ž β€Ž β€β€β€Ž β€Žβ€β€β€Ž β€Ž47β€β€β€Ž β€Ž

STATEMENTS OF FINANCIAL POSITION AS AT 31 OCTOBER 20X6

Binkyβ€β€β€Ž β€Ž Smokeyβ€β€β€Ž β€Ž
$'000β€β€β€Ž β€Ž $'000β€β€β€Ž β€Ž
Assets
Non-current assets
At cost 320β€β€β€Ž β€Ž 515β€β€β€Ž β€Ž
Accumulated depreciation (75) (96)
β€β€β€Ž β€Ž245β€β€β€Ž β€Ž β€β€β€Ž β€Ž419β€β€β€Ž β€Ž
Current assets
Inventory 91β€β€β€Ž β€Ž 293β€β€β€Ž β€Ž
Receivables 46β€β€β€Ž β€Ž 75β€β€β€Ž β€Ž
Bank 64β€β€β€Ž β€Ž 15β€β€β€Ž β€Ž
Total assets β€β€β€Ž β€Ž446β€β€β€Ž β€Ž β€β€β€Ž β€Ž802β€β€β€Ž β€Ž
Equity and liabilities
Equity
Share capital 150β€β€β€Ž β€Ž 250β€β€β€Ž β€Ž
Retained earnings 108β€β€β€Ž β€Ž 177β€β€β€Ž β€Ž
10% Loan note β€“β€β€β€Ž β€Ž 50β€β€β€Ž β€Ž
Current liabilities 188β€β€β€Ž β€Ž 325β€β€β€Ž β€Ž
Total equity and liabilities β€β€β€Ž β€Ž446β€β€β€Ž β€Ž β€β€β€Ž β€Ž802β€β€β€Ž β€Ž

TASK

What is the Net Profit % of Smokey? (upto one decimal place 00.0%)

16 / 23

Two companies Binky and Smokey trade in the same market. Their financial statements for the year ended 31 October 20X6 are summarised below:

STATEMENTS OF PROFIT OR LOSS FOR THE YEAR ENDED 31 OCTOBER 20X6

Binkyβ€β€β€Ž β€Ž Smokeyβ€β€β€Ž β€Ž
$'000β€β€β€Ž β€Ž $'000β€β€β€Ž β€Ž
Sales revenue 284β€β€β€Ž β€Ž 305β€β€β€Ž β€Ž
Cost of sales (155) (151)
Gross profit β€β€β€Ž β€Žβ€β€β€Ž β€Ž129β€β€β€Ž β€Ž β€β€β€Ž β€Žβ€β€β€Ž β€Ž154β€β€β€Ž β€Ž
Expenses
β€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€ŽAdministrative (24) (37)
β€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€ŽSelling and distribution (35) (53)
β€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€ŽDepreciation (9) (12)
β€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€ŽLoan note interest (–) (5)
Net Profit β€β€β€Ž β€Žβ€β€β€Ž β€Ž61β€β€β€Ž β€Ž β€β€β€Ž β€Žβ€β€β€Ž β€Ž47β€β€β€Ž β€Ž

STATEMENTS OF FINANCIAL POSITION AS AT 31 OCTOBER 20X6

Binkyβ€β€β€Ž β€Ž Smokeyβ€β€β€Ž β€Ž
$'000β€β€β€Ž β€Ž $'000β€β€β€Ž β€Ž
Assets
Non-current assets
At cost 320β€β€β€Ž β€Ž 515β€β€β€Ž β€Ž
Accumulated depreciation (75) (96)
β€β€β€Ž β€Ž245β€β€β€Ž β€Ž β€β€β€Ž β€Ž419β€β€β€Ž β€Ž
Current assets
Inventory 91β€β€β€Ž β€Ž 293β€β€β€Ž β€Ž
Receivables 46β€β€β€Ž β€Ž 75β€β€β€Ž β€Ž
Bank 64β€β€β€Ž β€Ž 15β€β€β€Ž β€Ž
Total assets β€β€β€Ž β€Ž446β€β€β€Ž β€Ž β€β€β€Ž β€Ž802β€β€β€Ž β€Ž
Equity and liabilities
Equity
Share capital 150β€β€β€Ž β€Ž 250β€β€β€Ž β€Ž
Retained earnings 108β€β€β€Ž β€Ž 177β€β€β€Ž β€Ž
10% Loan note β€“β€β€β€Ž β€Ž 50β€β€β€Ž β€Ž
Current liabilities 188β€β€β€Ž β€Ž 325β€β€β€Ž β€Ž
Total equity and liabilities β€β€β€Ž β€Ž446β€β€β€Ž β€Ž β€β€β€Ž β€Ž802β€β€β€Ž β€Ž

TASK

What is the Asset turnover % of Binky? (upto one decimal place 00.0%)

17 / 23

Two companies Binky and Smokey trade in the same market. Their financial statements for the year ended 31 October 20X6 are summarised below:

STATEMENTS OF PROFIT OR LOSS FOR THE YEAR ENDED 31 OCTOBER 20X6

Binkyβ€β€β€Ž β€Ž Smokeyβ€β€β€Ž β€Ž
$'000β€β€β€Ž β€Ž $'000β€β€β€Ž β€Ž
Sales revenue 284β€β€β€Ž β€Ž 305β€β€β€Ž β€Ž
Cost of sales (155) (151)
Gross profit β€β€β€Ž β€Žβ€β€β€Ž β€Ž129β€β€β€Ž β€Ž β€β€β€Ž β€Žβ€β€β€Ž β€Ž154β€β€β€Ž β€Ž
Expenses
β€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€ŽAdministrative (24) (37)
β€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€ŽSelling and distribution (35) (53)
β€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€ŽDepreciation (9) (12)
β€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€ŽLoan note interest (–) (5)
Net Profit β€β€β€Ž β€Žβ€β€β€Ž β€Ž61β€β€β€Ž β€Ž β€β€β€Ž β€Žβ€β€β€Ž β€Ž47β€β€β€Ž β€Ž

STATEMENTS OF FINANCIAL POSITION AS AT 31 OCTOBER 20X6

Binkyβ€β€β€Ž β€Ž Smokeyβ€β€β€Ž β€Ž
$'000β€β€β€Ž β€Ž $'000β€β€β€Ž β€Ž
Assets
Non-current assets
At cost 320β€β€β€Ž β€Ž 515β€β€β€Ž β€Ž
Accumulated depreciation (75) (96)
β€β€β€Ž β€Ž245β€β€β€Ž β€Ž β€β€β€Ž β€Ž419β€β€β€Ž β€Ž
Current assets
Inventory 91β€β€β€Ž β€Ž 293β€β€β€Ž β€Ž
Receivables 46β€β€β€Ž β€Ž 75β€β€β€Ž β€Ž
Bank 64β€β€β€Ž β€Ž 15β€β€β€Ž β€Ž
Total assets β€β€β€Ž β€Ž446β€β€β€Ž β€Ž β€β€β€Ž β€Ž802β€β€β€Ž β€Ž
Equity and liabilities
Equity
Share capital 150β€β€β€Ž β€Ž 250β€β€β€Ž β€Ž
Retained earnings 108β€β€β€Ž β€Ž 177β€β€β€Ž β€Ž
10% Loan note β€“β€β€β€Ž β€Ž 50β€β€β€Ž β€Ž
Current liabilities 188β€β€β€Ž β€Ž 325β€β€β€Ž β€Ž
Total equity and liabilities β€β€β€Ž β€Ž446β€β€β€Ž β€Ž β€β€β€Ž β€Ž802β€β€β€Ž β€Ž

TASK

What is the Asset turnover % of Smokey? (upto one decimal place 00.0%)

18 / 23

Two companies Binky and Smokey trade in the same market. Their financial statements for the year ended 31 October 20X6 are summarised below:

STATEMENTS OF PROFIT OR LOSS FOR THE YEAR ENDED 31 OCTOBER 20X6

Binkyβ€β€β€Ž β€Ž Smokeyβ€β€β€Ž β€Ž
$'000β€β€β€Ž β€Ž $'000β€β€β€Ž β€Ž
Sales revenue 284β€β€β€Ž β€Ž 305β€β€β€Ž β€Ž
Cost of sales (155) (151)
Gross profit β€β€β€Ž β€Žβ€β€β€Ž β€Ž129β€β€β€Ž β€Ž β€β€β€Ž β€Žβ€β€β€Ž β€Ž154β€β€β€Ž β€Ž
Expenses
β€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€ŽAdministrative (24) (37)
β€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€ŽSelling and distribution (35) (53)
β€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€ŽDepreciation (9) (12)
β€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€ŽLoan note interest (–) (5)
Net Profit β€β€β€Ž β€Žβ€β€β€Ž β€Ž61β€β€β€Ž β€Ž β€β€β€Ž β€Žβ€β€β€Ž β€Ž47β€β€β€Ž β€Ž

STATEMENTS OF FINANCIAL POSITION AS AT 31 OCTOBER 20X6

Binkyβ€β€β€Ž β€Ž Smokeyβ€β€β€Ž β€Ž
$'000β€β€β€Ž β€Ž $'000β€β€β€Ž β€Ž
Assets
Non-current assets
At cost 320β€β€β€Ž β€Ž 515β€β€β€Ž β€Ž
Accumulated depreciation (75) (96)
β€β€β€Ž β€Ž245β€β€β€Ž β€Ž β€β€β€Ž β€Ž419β€β€β€Ž β€Ž
Current assets
Inventory 91β€β€β€Ž β€Ž 293β€β€β€Ž β€Ž
Receivables 46β€β€β€Ž β€Ž 75β€β€β€Ž β€Ž
Bank 64β€β€β€Ž β€Ž 15β€β€β€Ž β€Ž
Total assets β€β€β€Ž β€Ž446β€β€β€Ž β€Ž β€β€β€Ž β€Ž802β€β€β€Ž β€Ž
Equity and liabilities
Equity
Share capital 150β€β€β€Ž β€Ž 250β€β€β€Ž β€Ž
Retained earnings 108β€β€β€Ž β€Ž 177β€β€β€Ž β€Ž
10% Loan note β€“β€β€β€Ž β€Ž 50β€β€β€Ž β€Ž
Current liabilities 188β€β€β€Ž β€Ž 325β€β€β€Ž β€Ž
Total equity and liabilities β€β€β€Ž β€Ž446β€β€β€Ž β€Ž β€β€β€Ž β€Ž802β€β€β€Ž β€Ž

TASK

What is the Current Ratio of Binky? (upto one decimal place 00.0%)

19 / 23

Two companies Binky and Smokey trade in the same market. Their financial statements for the year ended 31 October 20X6 are summarised below:

STATEMENTS OF PROFIT OR LOSS FOR THE YEAR ENDED 31 OCTOBER 20X6

Binkyβ€β€β€Ž β€Ž Smokeyβ€β€β€Ž β€Ž
$'000β€β€β€Ž β€Ž $'000β€β€β€Ž β€Ž
Sales revenue 284β€β€β€Ž β€Ž 305β€β€β€Ž β€Ž
Cost of sales (155) (151)
Gross profit β€β€β€Ž β€Žβ€β€β€Ž β€Ž129β€β€β€Ž β€Ž β€β€β€Ž β€Žβ€β€β€Ž β€Ž154β€β€β€Ž β€Ž
Expenses
β€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€ŽAdministrative (24) (37)
β€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€ŽSelling and distribution (35) (53)
β€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€ŽDepreciation (9) (12)
β€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€ŽLoan note interest (–) (5)
Net Profit β€β€β€Ž β€Žβ€β€β€Ž β€Ž61β€β€β€Ž β€Ž β€β€β€Ž β€Žβ€β€β€Ž β€Ž47β€β€β€Ž β€Ž

STATEMENTS OF FINANCIAL POSITION AS AT 31 OCTOBER 20X6

Binkyβ€β€β€Ž β€Ž Smokeyβ€β€β€Ž β€Ž
$'000β€β€β€Ž β€Ž $'000β€β€β€Ž β€Ž
Assets
Non-current assets
At cost 320β€β€β€Ž β€Ž 515β€β€β€Ž β€Ž
Accumulated depreciation (75) (96)
β€β€β€Ž β€Ž245β€β€β€Ž β€Ž β€β€β€Ž β€Ž419β€β€β€Ž β€Ž
Current assets
Inventory 91β€β€β€Ž β€Ž 293β€β€β€Ž β€Ž
Receivables 46β€β€β€Ž β€Ž 75β€β€β€Ž β€Ž
Bank 64β€β€β€Ž β€Ž 15β€β€β€Ž β€Ž
Total assets β€β€β€Ž β€Ž446β€β€β€Ž β€Ž β€β€β€Ž β€Ž802β€β€β€Ž β€Ž
Equity and liabilities
Equity
Share capital 150β€β€β€Ž β€Ž 250β€β€β€Ž β€Ž
Retained earnings 108β€β€β€Ž β€Ž 177β€β€β€Ž β€Ž
10% Loan note β€“β€β€β€Ž β€Ž 50β€β€β€Ž β€Ž
Current liabilities 188β€β€β€Ž β€Ž 325β€β€β€Ž β€Ž
Total equity and liabilities β€β€β€Ž β€Ž446β€β€β€Ž β€Ž β€β€β€Ž β€Ž802β€β€β€Ž β€Ž

TASK

What is the Current Ratio of Smokey? (upto one decimal place 00.0%)

20 / 23

Two companies Binky and Smokey trade in the same market. Their financial statements for the year ended 31 October 20X6 are summarised below:

STATEMENTS OF PROFIT OR LOSS FOR THE YEAR ENDED 31 OCTOBER 20X6

Binkyβ€β€β€Ž β€Ž Smokeyβ€β€β€Ž β€Ž
$'000β€β€β€Ž β€Ž $'000β€β€β€Ž β€Ž
Sales revenue 284β€β€β€Ž β€Ž 305β€β€β€Ž β€Ž
Cost of sales (155) (151)
Gross profit β€β€β€Ž β€Žβ€β€β€Ž β€Ž129β€β€β€Ž β€Ž β€β€β€Ž β€Žβ€β€β€Ž β€Ž154β€β€β€Ž β€Ž
Expenses
β€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€ŽAdministrative (24) (37)
β€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€ŽSelling and distribution (35) (53)
β€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€ŽDepreciation (9) (12)
β€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€ŽLoan note interest (–) (5)
Net Profit β€β€β€Ž β€Žβ€β€β€Ž β€Ž61β€β€β€Ž β€Ž β€β€β€Ž β€Žβ€β€β€Ž β€Ž47β€β€β€Ž β€Ž

STATEMENTS OF FINANCIAL POSITION AS AT 31 OCTOBER 20X6

Binkyβ€β€β€Ž β€Ž Smokeyβ€β€β€Ž β€Ž
$'000β€β€β€Ž β€Ž $'000β€β€β€Ž β€Ž
Assets
Non-current assets
At cost 320β€β€β€Ž β€Ž 515β€β€β€Ž β€Ž
Accumulated depreciation (75) (96)
β€β€β€Ž β€Ž245β€β€β€Ž β€Ž β€β€β€Ž β€Ž419β€β€β€Ž β€Ž
Current assets
Inventory 91β€β€β€Ž β€Ž 293β€β€β€Ž β€Ž
Receivables 46β€β€β€Ž β€Ž 75β€β€β€Ž β€Ž
Bank 64β€β€β€Ž β€Ž 15β€β€β€Ž β€Ž
Total assets β€β€β€Ž β€Ž446β€β€β€Ž β€Ž β€β€β€Ž β€Ž802β€β€β€Ž β€Ž
Equity and liabilities
Equity
Share capital 150β€β€β€Ž β€Ž 250β€β€β€Ž β€Ž
Retained earnings 108β€β€β€Ž β€Ž 177β€β€β€Ž β€Ž
10% Loan note β€“β€β€β€Ž β€Ž 50β€β€β€Ž β€Ž
Current liabilities 188β€β€β€Ž β€Ž 325β€β€β€Ž β€Ž
Total equity and liabilities β€β€β€Ž β€Ž446β€β€β€Ž β€Ž β€β€β€Ž β€Ž802β€β€β€Ž β€Ž

TASK

What is the Quick Ratio of Binky? (upto one decimal place 00.0%)

21 / 23

Two companies Binky and Smokey trade in the same market. Their financial statements for the year ended 31 October 20X6 are summarised below:

STATEMENTS OF PROFIT OR LOSS FOR THE YEAR ENDED 31 OCTOBER 20X6

Binkyβ€β€β€Ž β€Ž Smokeyβ€β€β€Ž β€Ž
$'000β€β€β€Ž β€Ž $'000β€β€β€Ž β€Ž
Sales revenue 284β€β€β€Ž β€Ž 305β€β€β€Ž β€Ž
Cost of sales (155) (151)
Gross profit β€β€β€Ž β€Žβ€β€β€Ž β€Ž129β€β€β€Ž β€Ž β€β€β€Ž β€Žβ€β€β€Ž β€Ž154β€β€β€Ž β€Ž
Expenses
β€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€ŽAdministrative (24) (37)
β€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€ŽSelling and distribution (35) (53)
β€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€ŽDepreciation (9) (12)
β€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€ŽLoan note interest (–) (5)
Net Profit β€β€β€Ž β€Žβ€β€β€Ž β€Ž61β€β€β€Ž β€Ž β€β€β€Ž β€Žβ€β€β€Ž β€Ž47β€β€β€Ž β€Ž

STATEMENTS OF FINANCIAL POSITION AS AT 31 OCTOBER 20X6

Binkyβ€β€β€Ž β€Ž Smokeyβ€β€β€Ž β€Ž
$'000β€β€β€Ž β€Ž $'000β€β€β€Ž β€Ž
Assets
Non-current assets
At cost 320β€β€β€Ž β€Ž 515β€β€β€Ž β€Ž
Accumulated depreciation (75) (96)
β€β€β€Ž β€Ž245β€β€β€Ž β€Ž β€β€β€Ž β€Ž419β€β€β€Ž β€Ž
Current assets
Inventory 91β€β€β€Ž β€Ž 293β€β€β€Ž β€Ž
Receivables 46β€β€β€Ž β€Ž 75β€β€β€Ž β€Ž
Bank 64β€β€β€Ž β€Ž 15β€β€β€Ž β€Ž
Total assets β€β€β€Ž β€Ž446β€β€β€Ž β€Ž β€β€β€Ž β€Ž802β€β€β€Ž β€Ž
Equity and liabilities
Equity
Share capital 150β€β€β€Ž β€Ž 250β€β€β€Ž β€Ž
Retained earnings 108β€β€β€Ž β€Ž 177β€β€β€Ž β€Ž
10% Loan note β€“β€β€β€Ž β€Ž 50β€β€β€Ž β€Ž
Current liabilities 188β€β€β€Ž β€Ž 325β€β€β€Ž β€Ž
Total equity and liabilities β€β€β€Ž β€Ž446β€β€β€Ž β€Ž β€β€β€Ž β€Ž802β€β€β€Ž β€Ž

TASK

What is the Quick Ratio of Smokey? (upto one decimal place 00.0%)

22 / 23

Two companies Binky and Smokey trade in the same market. Their financial statements for the year ended 31 October 20X6 are summarised below:

STATEMENTS OF PROFIT OR LOSS FOR THE YEAR ENDED 31 OCTOBER 20X6

Binkyβ€β€β€Ž β€Ž Smokeyβ€β€β€Ž β€Ž
$'000β€β€β€Ž β€Ž $'000β€β€β€Ž β€Ž
Sales revenue 284β€β€β€Ž β€Ž 305β€β€β€Ž β€Ž
Cost of sales (155) (151)
Gross profit β€β€β€Ž β€Žβ€β€β€Ž β€Ž129β€β€β€Ž β€Ž β€β€β€Ž β€Žβ€β€β€Ž β€Ž154β€β€β€Ž β€Ž
Expenses
β€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€ŽAdministrative (24) (37)
β€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€ŽSelling and distribution (35) (53)
β€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€ŽDepreciation (9) (12)
β€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€ŽLoan note interest (–) (5)
Net Profit β€β€β€Ž β€Žβ€β€β€Ž β€Ž61β€β€β€Ž β€Ž β€β€β€Ž β€Žβ€β€β€Ž β€Ž47β€β€β€Ž β€Ž

STATEMENTS OF FINANCIAL POSITION AS AT 31 OCTOBER 20X6

Binkyβ€β€β€Ž β€Ž Smokeyβ€β€β€Ž β€Ž
$'000β€β€β€Ž β€Ž $'000β€β€β€Ž β€Ž
Assets
Non-current assets
At cost 320β€β€β€Ž β€Ž 515β€β€β€Ž β€Ž
Accumulated depreciation (75) (96)
β€β€β€Ž β€Ž245β€β€β€Ž β€Ž β€β€β€Ž β€Ž419β€β€β€Ž β€Ž
Current assets
Inventory 91β€β€β€Ž β€Ž 293β€β€β€Ž β€Ž
Receivables 46β€β€β€Ž β€Ž 75β€β€β€Ž β€Ž
Bank 64β€β€β€Ž β€Ž 15β€β€β€Ž β€Ž
Total assets β€β€β€Ž β€Ž446β€β€β€Ž β€Ž β€β€β€Ž β€Ž802β€β€β€Ž β€Ž
Equity and liabilities
Equity
Share capital 150β€β€β€Ž β€Ž 250β€β€β€Ž β€Ž
Retained earnings 108β€β€β€Ž β€Ž 177β€β€β€Ž β€Ž
10% Loan note β€“β€β€β€Ž β€Ž 50β€β€β€Ž β€Ž
Current liabilities 188β€β€β€Ž β€Ž 325β€β€β€Ž β€Ž
Total equity and liabilities β€β€β€Ž β€Ž446β€β€β€Ž β€Ž β€β€β€Ž β€Ž802β€β€β€Ž β€Ž

TASK

What is the Receivables collection period of Binky?

23 / 23

Two companies Binky and Smokey trade in the same market. Their financial statements for the year ended 31 October 20X6 are summarised below:

STATEMENTS OF PROFIT OR LOSS FOR THE YEAR ENDED 31 OCTOBER 20X6

Binkyβ€β€β€Ž β€Ž Smokeyβ€β€β€Ž β€Ž
$'000β€β€β€Ž β€Ž $'000β€β€β€Ž β€Ž
Sales revenue 284β€β€β€Ž β€Ž 305β€β€β€Ž β€Ž
Cost of sales (155) (151)
Gross profit β€β€β€Ž β€Žβ€β€β€Ž β€Ž129β€β€β€Ž β€Ž β€β€β€Ž β€Žβ€β€β€Ž β€Ž154β€β€β€Ž β€Ž
Expenses
β€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€ŽAdministrative (24) (37)
β€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€ŽSelling and distribution (35) (53)
β€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€ŽDepreciation (9) (12)
β€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€Žβ€β€β€Ž β€ŽLoan note interest (–) (5)
Net Profit β€β€β€Ž β€Žβ€β€β€Ž β€Ž61β€β€β€Ž β€Ž β€β€β€Ž β€Žβ€β€β€Ž β€Ž47β€β€β€Ž β€Ž

STATEMENTS OF FINANCIAL POSITION AS AT 31 OCTOBER 20X6

Binkyβ€β€β€Ž β€Ž Smokeyβ€β€β€Ž β€Ž
$'000β€β€β€Ž β€Ž $'000β€β€β€Ž β€Ž
Assets
Non-current assets
At cost 320β€β€β€Ž β€Ž 515β€β€β€Ž β€Ž
Accumulated depreciation (75) (96)
β€β€β€Ž β€Ž245β€β€β€Ž β€Ž β€β€β€Ž β€Ž419β€β€β€Ž β€Ž
Current assets
Inventory 91β€β€β€Ž β€Ž 293β€β€β€Ž β€Ž
Receivables 46β€β€β€Ž β€Ž 75β€β€β€Ž β€Ž
Bank 64β€β€β€Ž β€Ž 15β€β€β€Ž β€Ž
Total assets β€β€β€Ž β€Ž446β€β€β€Ž β€Ž β€β€β€Ž β€Ž802β€β€β€Ž β€Ž
Equity and liabilities
Equity
Share capital 150β€β€β€Ž β€Ž 250β€β€β€Ž β€Ž
Retained earnings 108β€β€β€Ž β€Ž 177β€β€β€Ž β€Ž
10% Loan note β€“β€β€β€Ž β€Ž 50β€β€β€Ž β€Ž
Current liabilities 188β€β€β€Ž β€Ž 325β€β€β€Ž β€Ž
Total equity and liabilities β€β€β€Ž β€Ž446β€β€β€Ž β€Ž β€β€β€Ž β€Ž802β€β€β€Ž β€Ž

TASK

What is the Receivables collection period of Smokey?

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