measured by the acid test ratio. B. Deteriorated from 2018 to 2019
as measured by the acid test ratio. C. Remained the same from 2018
to 2019 as measured by the current ratio. D. Improved from 2018 to
2019 as measured by the current ratio.
- 1 1 Bella Ltd S Liquidity A Improved From 2018 To 2019 As Measured By The Acid Test Ratio B Deteriorated From 2018 T 1 (74.6 KiB) Viewed 67 times
2019 as measured by the gross profit margin. B. Worsened from 2018
to 2019 as measured by the net profit margin. C. Improved from 2018
to 2019 as measured by the gross profit margin. D. Improved from
2018 to 2019 as measured by the net profit margin
1.3 If the debtor’s collection period of BELLA Ltd. for 2018 was
62 days, and the credit policy of BELLA Ltd. is 60 days, which one
of the following statements is true when taking the debtor’s
collection period of 2019 into consideration? A. The debtor’s
collection period improved from 2018 to 2019, which is also good
for the cash flow of BELLA Ltd. B. The debtor’s collection period
worsened from 2018 to 2019, which is also good for the cash flow of
BELLA Ltd. C. The debtor’s collection period worsened from 2018 to
2019, which is also bad for the cash flow of BELLA Ltd. D. The
debtor’s collection period improved from 2018 to 2019, which is
also bad for the cash flow of BELLA Ltd.
1.4 What is the debtor’s collection period of BELLA Ltd. for
2019? A. 98,85 days B. 59,31 days C. 36,5 days D. 60,83
days
1.5 Which one of the following statements is true when analysing
the debt/equity ratio of BELLA Ltd.? A. The debt/equity ratio
worsened from 2018 to 2019, and BELLA Ltd. now has more debt than
equity financing in 2019. B. The debt/equity ratio worsened from
2018 to 2019, but BELLA Ltd. still has less debt than equity
financing in 2019. C. The debt/equity ratio improved from 2018 to
2019, and BELLA Ltd. now has less debt than equity financing in
2019. D. The debt/equity ratio improved from 2018 to 2019, but
BELLA Ltd. still has more debt than equity financing in 2019.
1.6 If the inventory turnover rate of BELLA Ltd. for 2018 was 7
times per year, which one of the following statements is true when
taking the 2019 inventory turnover rate into consideration? A. The
inventory turnover rate increased from 2018 to 2019 which entails
that inventory is moving faster in 2019 when compared to 2018. B.
The inventory turnover rate increased from 2018 to 2019 which
entails that inventory is moving slower in 2019 when compared to
2018. C. The inventory turnover rate decreased from 2018 to 2019
which entails that inventory is moving faster in 2019 when compared
to 2018. D. The inventory turnover rate decreased from 2018 to 2019
which entails that inventory is moving slower in 2019 when compared
to 2018.
1.7 Which one of the following statements is correct? A. BELLA
Ltd. must close their doors as they are in serious financial
distress. B. Although the net profit percentage of BELLA Ltd.
decreased from 2018 to 2019, sales volumes doubled which attributed
to more net profit in Rand value. C. BELLA Ltd. is in a better cash
position in 2019 when compared to 2018. D. The decrease in BELLA
Ltds’ gross profit percentage from 2018 to 2019 could be attributed
in increased operating expenses.
1.8 When considering the trade payables (creditors) of BELLA
Ltd., which one of the following statements would represent the
correct effect in the cash flow statement of 2019? A. Cash inflow
from operating activities of R5 000 000. B. Cash inflow from
financing activities of R 5 000 000. C. Cash outflow from operating
activities of R5 000 000. D. Cash outflow from financing activities
of R5 000 000.
1.9 Which one of the following statements is correct? A. BELLA
Ltd. had a positive cash flow of R20 000 000 for the year ending
2019. B. BELLA Ltd. had a negative cash flow of R20 000 000 for the
year ending 2019. C. BELLA Ltd. had a positive cash flow of R5 000
000 for the year ending 2019. D. BELLA Ltd. had a negative cash
flow of R5 000 000 for the year ending 2019.
BELLA Ltd. operates in the construction industry and sells a range of building materials to large to firms. Use the following information extracted from BELLA Ltd's 2018 and 2019 financial statements in order to answer the multiple-choice questions on eFundi Part 1 of eFundi test 3 (Group assignment). Assume 365 days in a year. 2019 2018 Extracted from BELLA Ltd. R'000 R'000 Sales (60% on credit) 200 000 100 000 Cost of sales 120 000 55 000 Profit after tax 15 000 10 000 65 000 20 000 Property, plant and equipment (carrying value) Inventory Bank (dt) Trade receivables (debtors) 60 000 10 000 15 000 15 000 25 000 Ordinary shares Retained earnings Long-term loan Trade payables (creditors) Short-term loan Bank overdraft (ct) 15 000 40 000 15 000 25 000 5 000 5 000 10 000 25 000 35 000 20 000 10 000