Answer Happy

DELTA LIMITED
INCOME STATEMENTS FOR THE YEARS ENDED
2018
2019
2020
€ ‘000
€’000
€’000
Turnover
400
520
600
Cost of sales
320
440
500
Gross Profit
80
80
100
Administrative Expenses
16
24
28
Distribution Expenses
24
20
20
40
44
48
Net Profit
40
36
52
Taxation
Ignore
Ignore
Ignore
DELTA LIMITED
STATEMENTS OF FINANCIAL POSITION (BALANCE
SHEETS)
AS AT
31/12/2018
31/12/2019
31/12/2020
€’000
€’000
€’000
Fixed Assets
240
240
240
Current Assets
Stock (Inventory)
40
96
160
Debtors (Receivables)
24
28
36
Cash at Bank
8
72
124
196
Current Liabilities
Creditors
32
36
52
Bank Overdraft
12
16
32
48
68
Working Capital
40
76
128
Net Capital Employed
280
316
368
Capital
Share Capital (200K shares of €1.00 each)
200
200
200
Reserves (Profit and Loss Reserve)
80
116
168
280
316
368
a)Calculate the relevant liquidity ratios for all years, comment
on the trend (change from year to year) and on how it compares with
the industry average:
Current Ratio (Industry Average = 3.1 times)
Quick Ratio (Industry Average =1.1 times)
b)Calculate the Debt Ratio for all years, comment on the trend
and on how it compares with the industry average
(Industry Average = 0.8 times)
c)Calculate the Asset Turnover Ratio for all years, comment on
the trend and on how it compares with the industry
average (Industry Average = 0.25 = 25%)
d)Calculate the Return on Total Assets (ROA) Ratio for all
years, comment on the trend and on how it compares with the
industry average (Industry Average = 0.12 = 12%)
e)Calculate the Return on Equity (ROE) Ratio for all years,
comment on the trend and on how it compares with the industry
average (Industry Average = 0.24 = 24%)