Write A Report To The Director Of The Company Commenting On The Performance Of The Company
REQUIRED
Part (a)
Calculate the following ratios for Focus Ltd for the two years:
- Gross profit margin
- Mark-up
- Expenses as a % of sales
- Net profit margin
- Rate of return of net profit on capital employed (use the average of shareholder funds)
- Inventory turnover
- Current ratio
- Acid test ratio
- Receivables collection period
- Payables payment period
The ratios should be produced in the form of a table, as follows:
Part (b)
Write a report to the director of the company commenting on the performance of the company in terms of profitability, liquidity and use of assets.
A clear report should address all important matters in 1,000 words maximum. A very good report could achieve this objective in 700 words. It is the quality of the commentary and addressing all the issues relating to the company that is important.
Calculations are to be in the table of ratios requested in part (a) and not mixed in with the narrative of the report.
(60 Marks)
