Business Finance - Accounting Assignment lo3

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Kindly find enclosed LO3 assignmnet , You need to submit your answer on Excel .

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LO3-answersheet.xlsx

Sheet2

Omega Bookshop Omega company
Income Statement-comparative statements Financial position- Years ended December 31,2021 and 2022
December 31.2021 December 31.2022 Item 2021 2022 Ratio 2021 2022 Ratio interpretation Compare (2021&2022) Interpretation
Net Sales (50% credit) 3640 4990 Assets Liquidity
Cost of goods sold -1920 -2640 Current Assets net working capital
Gross profit 1720 2350 Cash & Cash equivalent 50 72 current ratio
Operating expenses (OPEX): Accounts Receivable 180 190 Quick ratio
Salaries and wages expenses 900 1150 Merchandising inventory 250 320 cash ratio
Supplies expenses 200 300 Prepaid expense’s 10 18 Profitability Ratio
Rent expenses 300 400 Total current Assets 490 600
Utilities expenses 200 300 Long term investment 200 180 Net Profit Margin
Total operating expenses -1600 -2150 Property plant & equipment (PP&E) 900 1004 Gross Margin Ratio
Income before interest and tax 120 200 Total Assets 1590 1784 Efficiency
Interest expenses -20 -40 Liabilities Accounts Receivable Turnover Ratio
Income before tax 100 160 Accounts payable 90 235 Accounts Receivable Days
Tax (25%) -25 -40 salaries payable 25 30 Inventory Turnover Ratio
Net Income (Net loss) 75 120 Tax payable 25 35 Inventory Turnover Days
Total current liabilities 140 300 investment ratios
Long term Liabilities 250 250 Earnings per share
Total liabilities 390 550 price-to-earnings (P/E) ratio
Stockholders’ Equity
Common stock 900 1050
Retained earning 300 184
Total stockholders’ Equity 1200 1234
Total Equity & Liabilities 1590 1784

Sheet3

2021 2022 Industry Average
Current ratio 1.2 1.1 2
Quick ratio 0.76 0.8 1.25
Inventory turnover 0.8 0.7 1.6
average collection period 98 87 64
Profit margin 1.50% 2.10% 5.20%
Return on assets 4.50% 6.50% 1.10%
Return on equity 6.40% 90% 2.60%
2021 2022 Year to year comparison
Current ratio 1.2 1.1
Interpretation
Acid ratio 0.76 0.8
Interpretation
Inventory turnover 0.8 0.7
Interpretation
Average collection period 98 87
Interpretation
Profit margin 1.50% 2.10%
Interpretation
Return on assets 4.50% 6.50%
Interpretation
Return on equity 6.40% 90%
Interpretation