问答题
The following are the summarized financial statements of Mr. Wong's business for the years ended 31 December 2002 and 2003 respectively.
{{U}}Balance Sheets as at 31 December{{/U}}
2002 2003
＄ ＄
Fixed Assets (net book value) 22,500 18,000
Current Assets:
Stock 10,500 27,000
Debtors 18,000 54,000
Bank 1,500 —
Current liabilities:
Creditors (9,000) (22,500)
Bank overdraft {{U}}—{{/U}} {{U}}(15,000){{/U}}
Capital at 1 January 18,000 43,500
Net Profit for the year 45,000 52,500
Drawings {{U}}(19,500){{/U}} {{U}}(34,500){{/U}}
{{U}}Profit and Loss Account{{/U}}
Sales 180,000 300,000
Cost of sales {{U}}120,000{{/U}} {{U}}225,000{{/U}}
Gross profit 60,000 75,000
Operating expenses {{U}}15,000{{/U}} {{U}}22,500{{/U}}
Net profit 
Capital at 1 January 18,000 43,500
Net Profit for the year 45,000 52,500
Drawings {{U}}(19,500){{/U}} {{U}}(34,500){{/U}}
{{U}}Profit and Loss Account{{/U}}
Sales 180,000 300,000
Cost of sales {{U}}120,000{{/U}} {{U}}225,000{{/U}}
Gross profit 60,000 75,000
Operating expenses {{U}}15,000{{/U}} {{U}}22,500{{/U}}
Net profit
【正确答案】
【答案解析】(a) (i) Gross profit margin = Gross profit / Sales×100%
year 2002: = 60,000/180,000×100% = 33.3%
year 2003: = 75,000/300,000×100% = 25%
(ii) Net profit margin = Net profit/Sales×100%
year 2002: = 45,000/180,000×100% = 25%
year 2003: = 52,500/300,000×100% = 17.5%
(iii) Return on capital employed = Net profit / Capital employed×100%
year 2002: = 45,000/43,500×100% = 103.4%
year 2003: = 52,500/61,500×100% = 85.4%
(iv) Current ratio = Current assets / Current liabilities
year 2002: = 30,000/9,000 = 3.33 to 1
year 2003: = 81,000/37,500 = 2.16 to 1
(v) Acid test ratio = (Current assets- Stocks) / Current liabilities
year 2002: = 19,500/9,000 = 2.17 to 1
year 2003: = 54,000/37,500 = 1.44 to 1
(vi) Stock turnover period (days) = 365×Average Stock / Cost of sales
year 2002: = 365×0.5×(15,000+10,500)/120,000 = 39 days
year 2003: = 365×0.5×(10,500+27,000)/225,000 = 30 days
(vii) Debtors collection period (days) = 365×Average debtors/Sales
year 2002: = 365×0.5×(30,000+18,000)/180,000 = 49 days
year 2003: = 365×0.5×(18,000+54,000)/300,000 = 44 days
(viii) Gearing ratio = Long-term loan/(Long-term loan + Shareholders' fund)×100%
year 2002: = 0
year 2003: = 0
(b) Gearing ratio is an expression of the way companies are financed and the proportion of capital provided by risk taking shareholders and by lenders to the company.
This ratio assists the bankers in their loan lending decisions. Basically, gearing ratio is an indication of the risk to be undertaken by the ordinary shareholders because of the interest obligation of the long-term financial position, particularly the cash flows. A company's borrowing power will be correspondingly lower when there is an increase in the geared ratio.
(c) The following points should be noted:
Profitability
—Decrease in gross profit margin, net profit margin and return on capital employed.
—Although turnover is improved, profit margins am decreased. This may be due to inefficient control on operating expenses and/or less effective marketing strategy.
Liquidity
—Both current ratio and acid test ratio indicate that the liquidity position is worsening.
—It may be due to piling up of inventory and substantial outstanding debtors amounts.
Management Efficiency
—The credit control policy has been tightened up as the debtors' collection period has been reduced by 5 days.
—The stock control has also been improved as the stock turnover becomes faster.