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Calculate liquidity and working capital ratios from the accounts of a manufacturer of products for the construction industry, and comment on the ratios.

 

20X8

20X7

$m

$m

Turnover

2,065.0

1,788.7

Cost of sales

1,478.6

1,304.0

Gross profit

586.4

484.7

Current assets

 

 

Inventories

119.0

109.0

Receivables (note 1)

400.9

347.4

Short-term investments

4.2

18.8

Cash at bank and in hand

  48.2

  48.0

 

572.3

523.2

Payables: amounts falling due within one year

20X8

20X7

Loans and overdrafts

49.1

35.3

Corporation taxes

62.0

46.7

Dividend

19.2

14.3

Payables (note 2)

370.7

324.0

 

501.0

420.3

Net current assets

$m71.3

$m102.9

Notes

 

 

1         Trade receivables

329.8

285.4

2         Trade payables

236.2

210.8

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  • Category:- Accounting Basics
  • Reference No.:- M91593165

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