Page 35 - A Level Business Studies - Financial Analysis Tasks

Task 3.g
Look at the trading section of the Income Statement and the Current Liabilities section of the
Statement of Financial Position to calculate the Payable Days Ratio.

Income Statement - Trading Account (Extract) - YEAR 1 Income Statement - Trading Account (Extract) - YEAR 2
£ £ £ £
Sales Revenue 563,445 Sales Revenue 423,678

Less Cost of Sales Less Cost of Sales
Opening Inventory (Stock) 12,412 Opening Inventory (Stock) 14,534
Add Purchases 278,667 Add Purchases 275,238
291,079 289,772
Less Closing Inventory (Stock) 10,045 281,034 Less Closing Inventory (Stock) 12,178 277,594
Gross Profit 282,411 Gross Profit 146,084

Statement of Financial Position (Extract) £ £ Statement of Financial Position (Extract) £ £
Less CURRENT LIABILITIES Less CURRENT LIABILITIES
Trade Payables (Creditors) 24,312 Trade Payables (Creditors) 32,556
Unpaid Tax 2,000 Unpaid Tax 4,000
Dividends 50,000 76,312 Dividends 50,000 86,556

Payable Days Ratio Year 1 Days

Payable Days Ratio Year 2 Days

Evaluate the Payable Days Ratio between Yr 1 & Yr 2

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