Analysis of the Operation and Financial Condition of the Enterprise
Analysis of the Operation and Financial Condition of the Enterprise
Analysis of the Operation and Financial Condition of the Enterprise
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<strong>Analysis</strong> <strong>of</strong> <strong>the</strong> <strong>Operation</strong> <strong>and</strong> <strong>Financial</strong> <strong>Condition</strong> <strong>of</strong> <strong>the</strong> <strong>Enterprise</strong>Current ratio2.5 times‘Acid test ratio’1.1 timesStock turnover *6 timesAccounts receivable collection period *32 daysAccounts payable payment period*25 daysCapital provision (capital gearing)* 10 %Debts / Total assets 50 %* based on <strong>the</strong> data in <strong>the</strong> balance sheet as <strong>of</strong> <strong>the</strong> end <strong>of</strong> period.Table 4.2Income statements for <strong>the</strong> period ended 31 December (thous. CU)Year 1 Year 2 Year 3Amount <strong>of</strong> sales 13260 13772 14280Less: Cost <strong>of</strong> sales 10608 11016 11424Gross pr<strong>of</strong>it 2656 2756 2856Less: CostsSelling 404 480 490Administrative 800 905 1055Distribution 414 414 450Depreciation 408 2026 512 2311 612 2607Pr<strong>of</strong>it before tax 630 445 249Tax 150 101 45Pr<strong>of</strong>it after tax 480 344 204Table 4.3Balance sheet statements as <strong>of</strong> 31 December (thous. CU)Year 1 Year 2 Year 3Assets used:Fixed assets:L<strong>and</strong> <strong>and</strong> buildings 244 652 612Plant <strong>and</strong> equipment 756 592 512O<strong>the</strong>r fixed assets 144 40 32A 1144 1284 1156Current assets:Stock <strong>and</strong> work in progress 1532 2552 4132Accounts receivable 1224 1388 1940Cash at bank <strong>and</strong> in till 308 144 1043064 4084 6176Less: current liabilities86
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