Page 36 - A Level Business Studies - Financial Analysis Tasks

Task 3.h

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 1,436,678 Sales Revenue 1,546,456
Less Cost of Sales Less Cost of Sales

Opening Inventory (Stock) 45,312 Opening Inventory (Stock) 48,789
Add Purchases 576,789 Add Purchases 571,234
622,101 620,023
Less Closing Inventory (Stock) 44,567 577,534 Less Closing Inventory (Stock) 50,890 569,133
Gross Profit 859,144 Gross Profit 977,323

Statement of Financial Position (Extract) £ £ Statement of Financial Position (Extract) £ £
Less CURRENT LIABILITIES Less CURRENT LIABILITIES
Trade Payables (Creditors) 23,123 Trade Payables (Creditors) 45,345
Unpaid Tax 5,000 Unpaid Tax 4,000
Dividends 100,000 128,123 Dividends 50,000 99,345

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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