Ltd has the following information at 31 December 20X8: £000 £000 Profit for the year 12,500 Trade payables 3,700 Prepai
Posted: Thu May 26, 2022 8:24 am
Ltd has the following information at 31 December
20X8:
£000
£000
Profit for the year
12,500
Trade payables
3,700
Prepaid rent
2,000
Trade receivables
6,000
Salary accrual
2,000
Cash
3,000
Profit before interest and tax
32,200
Interest payable for the year
3,418
Inventories
900
Equipment (after depreciation)
12,000
Compute
Telford Telecom
Ltd's current ratio and interest cover ratios.
Question content area bottom
Part 1
The current ratio equation is: (Complete the necessary
drop downs.)
Current ratio
=
Part 2
The current ratio for
Telford Telecom
Limited is:
(Round to two decimal places as needed. If the answer is less
than 1, place a "0" in front of the
decimal point.)
Current ratio
=
=
enter your response here:1
Part 3
The interest cover ratio equation is: (Complete the
necessary drop downs.)
Interest cover ratio
=
Part 4
The interest cover ratio for
Telford Telecom
Limited is:
(Round to two decimal places.)
Interest cover ratio
=
=
enter your response here
Part 5
If you are informed that last year's interest cover was
4.5 times, answer the following:
A.
The interest cover has deteriorated in the year
B.
The interest cover has remained unchanged in the year
C.
The interest cover has improved in the year
20X8:
£000
£000
Profit for the year
12,500
Trade payables
3,700
Prepaid rent
2,000
Trade receivables
6,000
Salary accrual
2,000
Cash
3,000
Profit before interest and tax
32,200
Interest payable for the year
3,418
Inventories
900
Equipment (after depreciation)
12,000
Compute
Telford Telecom
Ltd's current ratio and interest cover ratios.
Question content area bottom
Part 1
The current ratio equation is: (Complete the necessary
drop downs.)
Current ratio
=
Part 2
The current ratio for
Telford Telecom
Limited is:
(Round to two decimal places as needed. If the answer is less
than 1, place a "0" in front of the
decimal point.)
Current ratio
=
=
enter your response here:1
Part 3
The interest cover ratio equation is: (Complete the
necessary drop downs.)
Interest cover ratio
=
Part 4
The interest cover ratio for
Telford Telecom
Limited is:
(Round to two decimal places.)
Interest cover ratio
=
=
enter your response here
Part 5
If you are informed that last year's interest cover was
4.5 times, answer the following:
A.
The interest cover has deteriorated in the year
B.
The interest cover has remained unchanged in the year
C.
The interest cover has improved in the year