368 Accounting: Business Reporting for Decision Making
8.29 LO4, 5, 6, 7
Rejected Ltd reports the following information.
$’000Total assets
Profit after tax
Current liabilities
Non-current liabilities1 920
65
570
830$’000Interest revenue
Interest expense
Tax expense
Current assets = 50% of total assets110
160
45From this information, calculate and interpret the following ratios (year-end figures will have to be
used because the comparative year figures are not available) and prepare a report on the financial
position and performance of Rejected Ltd.
a. liquidity ratio
b. return on equity
c. return on assets using:
i. profit
ii. EBIT
d. debt ratio.8.30 LO4, 5, 6, 7, 9
The balance sheet and the statement of profit or loss for MobileNet are presented below.
a. Calculate the following:
i. the current ratio
ii. the return on assets (use year-end figures)
iii. the return on shareholders’ funds (owner’s equity; use year-end figures)
iv. the debt to equity ratio.
b. Prepare a presentation on the financial analysis conducted, commenting on the performance and
position of MobileNet.MobileNet
Balance sheet as at 30 June 2016Assets
Current assets
Investments
Property, plant and equipment
Intangible assets$ 20 000
5 000
32 000
15 000
Total assets $ 72 000
Liabilities
Current liabilities
Long-term liabilities$9 000
16 000
Total liabilities $ 25 000
Owner’s equity
M. Phone — capital 47 000
Total liabilities & owner’s equity $ 72 000