Answer Happy

(a) The summarized financial statements of Bidii Enterprises Ltd. are as follows: Income statement for the year ended 30 September 2017 Sh.'000 Sales 20,000 Cost of sales (15,000) Gross profit 5,000 Administrative expenses (3,800) Debenture interest Net profit 1,200 2018 Sh.'000 28,000 (21,000) 7,000 (4,600) (400) 2,000 2018 Sh.'000 14,000 3,000 2,800 500 6,300 20,300 Balance sheet as at 30 September 2017 Sh.'000 Assets: Non-current assets (net book value) 11,000 Current assets: Inventories 2,000 Trade and other receivables 2,500 Balance at bank 4,500 Total assets 15,500 Equity and liabilities: Capital and reserves: Issued and fully paid 1,000,000 ordinary shares of Sh.10 each 10,000 Revenue reserves _3,000 13,000 Non current liabilities 8% debentures Current liabilities Trade and other payables 1,500 Bank overdraft 1,000 2,500 Total equity and liabilities 15,500 10,000 _4,100 14,100 5,000 1,200 _1200 20,300 Stock as at 1 October 2016 was Sh.4,000,000 Required: For each year, calculate the following: (a) Gross profit margin (b) Inventory turnover (c) Return on equity (d) Return on assets (e) Acid test ratio (2 marks) (2 marks) (2 marks) (2 marks) (2 marks)