Page 48 - A Level Business Studies - Financial Analysis Tasks

Task 5.f
Use the information provided calculate the Gearing Ratios for Year 1 and Year 2.

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

Year 1 (£) Year 2 (£)

Non-Current Assets 985,500 1,020

Current Assets 230,823 236,580

Current Liabilities (391,323) (469,606)

Non Current Liabilities (175,000) (56,892)

Net Assets 650,000 730,082

Total Equity 650,000 730,082

Table 2 - Extracts from Greenwood PLC - Income Statements

Year 1 (£) Year 2 (£)
Sales Revenue 2,546,789 3,324,567

Gross Profit 1,436,789 1,267,235
Operating Expenses 1,078,789 785,678

Operating Profit (Or Loss) 358,000 481,557

Gearing
Ratio Year 1

Gearing Year 2
Ratio

Evaluate the Gearing Ratios between year 1 and Year 2

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