Acc501 Assignment Announced

Assignment # 01 Marks: 20
“Accounting Ratios”
ABC Manufacturing Company had sales amounting Rs. 40,000,000 in fiscal year 2009. Given below are some ratios of the ABC Company. Use this information to determine the Rupee values of various income statement and balance sheet accounts as requested.

ABC Manufacturing Company
Year ended December 31, 2009
Sales Rs.80,000,000
Gross profit margin 80%
Operating profit margin 35%
Net profit margin 8%
Return on total assets 16%
Return on common equity 20%
Total assets turnover 2
Average collection period 70 days

Calculate the values for the following;
• Gross profit
• Cost of goods sold
• Operating profit
• Operating expenses
• Earnings available for common stockholders
• Total assets
• Total common equity
• Accounts receivable
(Assume360 days in a financial year)

solution:

Gross Profit 64,000,000
COGS 16,000,000
Operating Profit 28,000,000
Operating Expenses 36,000,000
Earning Available for common stockholder's 3,200,000
Total assets 40,000,000
Total common equity 1,280,000
Accounts recievable 41,120,000