Page 47 - A Level Business Studies - Financial Analysis Tasks

Task 5.d

From the information provided calculate the Gearing Ratios for Year 1 and Year 2.

Table 1 - Extracts from Martech PLC - Statements of Financial Position

Year 1 (£) Year 2 (£) Gearing

Non-Current Assets 218,854 204,766 Ratio Year 1
Current Assets 44,393 50,390 Gearing Year 2
Ratio
Current Liabilities (20,124) (20,156)
Non Current Liabilities (50,000) (50,000)
Net Assets 193,123 185,000

Total Equity 193,123 185,000

Table 2 - Extracts from Martech PLC - Income Statements

Year 1 (£) Year 2 (£)
Sales Revenue 350,345 389,675

Gross Profit 175,000 179,345

Operating Expenses 112,567 131,678

Operating Profit 62,433 47,667

Task 5.e

From the information provided calculate the Gearing Ratios for Year 1 and Year 2.

Table 1 - Extracts from Virtech PLC - Statements of Financial Position

Year 1 (£) Year 2 (£) Gearing
Year 1
Non-Current Assets 499,026 519,975 Ratio
Gearing
Current Assets 83,576 110,344 Year 2
Ratio
Current Liabilities (110,368) (70,067)
Evaluate the Gearing Ratios
Non Current Liabilities (150,000) (250,000)
between year 1 and Year 2
Net Assets 322,234 310,252

Total Equity 322,234 310,252

Table 2 - Extracts from Virtech PLC - Income Statements

Year 1 (£) Year 2 (£)
Sales Revenue 1,356,912 1,562,345

Gross Profit 724,567 699,234
Operating Expenses 644,156 724,345
Operating Profit (Or Loss) 80,411 (25,111)

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