Chapter7s

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Unformatted text preview: Financial accounting for decision makers (5th edition) Atrill and McLaney Exercise solution Chapter 7 Crow Ltd Previous year Return on ordinary shareholders funds Profit for the year x 100% Share capital plus reserves Current year (120/231) x 100% 51.95% (60/327) x 100% 18.35% Average settlement period for trade receivables (120/600) 73 days (150/600) 91 days Trade receivables x 365 x 365 x 365 Credit sales revenue Inventories turnover period Inventories x 365 (165/300) 201 days (195/360) 198 days Cost of sales x 365 x 365 Current ratio Current assets 294/180 1.6 345/252 1.4 Current liabilit ies Acid test ratio Current assets ­ less inventories Current liabilit ies 129/180 0.7 150/252 0.60 Gross profit margin Gross profit x 100% (300/600) 50.00% (360/600) 40.00% Sales revenue x 100% x 100% O...
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This note was uploaded on 11/29/2009 for the course ACCOUNTING 2 taught by Professor Reynolds during the Spring '08 term at Open Uni..

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