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# FINANCIAL STATEMENTS ANALYSIS (FIN621) ASSIGNMENT NO. 02

DUE DATE: 15TH FEBRUARY, 2016

MARKS: 10

Learning Objective
 To understand the concept of financial statements analysis with ratio analysis.
 To understand the way ratio analysis is conducted and ratios are interpreted.

Learning Outcomes
After attempting this assignment, the students would be able to understand:
 The concept ratio analysis within the domain of financial statement analysis.
 How to conduct ratio analysis and interpret the resulting figures.

Assignment

Suppose, a construction firm is running a successful business in the market, however, complete information regarding its business operations and financial health is not available. Being a financial analyst, you intend to find some desired financial figures in order to be able to conduct an effective analysis of the firm’s financial health.
Required:

1. From the information given below, you need to determine the cost of goods sold of the firm using various ratios (Marks 3).

2. From the following information, you need to calculate receivable turnover ratio, days required to collect receivables and length of operating cycle (assume 365 days in a year) (Marks 4).

Current ratio
3.5
Quick ratio
1.5
Current liabilities
Rs. 300,000
Inventory turnover
2 times

3. Give logical interpretation of the inventory turnover ratio of the firm, if the inventory turnover in construction industry is “9.9”. Give reasons. (Marks 3).

(Note: proper formulas; step-wise complete working is required to secure good marks)
IMPORTANT:
24 hours extra / grace period after the due date is usually available to overcome uploading difficulties. This extra time should only be used to meet the emergencies and above mentioned due dates should always be treated as final to avoid any inconvenience.
IMPORTANT INSTRUCTIONS/ SOLUTION GUIDELINES/ SPECIAL INSTRUCTIONS
OTHER IMPORTANT INSTRUCTIONS:
 Make sure to upload the solution file before the due date on VULMS.
 Any submission made via email after the due date will not be accepted.
FORMATTING GUIDELINES:
 Use the font style “Times New Roman” or “Arial” and font size “12”.
 You may also compose your assignment in Open Office format.
 Use black and blue font colors only.
Opening accounts receivable
Rs.250,000
Closing accounts receivable
Rs.300,000
Net credit sales
Rs.2,500,000
Days required to sell inventory
55 days
REFERENCING GUIDELINES:
 Use APA style for referencing and citation. For guidance search “APA reference style” in Google and read various websites containing information for better understanding or visit http://linguistics.byu.edu/faculty/henrichsenl/apa/APA01.html
RULES FOR MARKING
 It is submitted after the due date.
 The file you uploaded does not open or is corrupt.
 It is in any format other than MS-Word or Open Office; e.g. Excel, PowerPoint, PDF etc.
 It is cheated or copied from other students, internet, books, journals etc.
Dear students!
As you know that Post Mid-Term semester activities have started and load shedding problem is also prevailing in our country. Keeping in view the fact, you all are advised to post your activities as early as possible without waiting for the due date. For your convenience; activity schedule has already been uploaded on VULMS for the current s

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Lets start a new discussion fellows

Best of Luck...

May we got full marks in this assignment

Attachments:

Current Ratio                         =          Current Asset

Current Liabilities

Quick Ratio                             =          Current Assets – (Inventory + Prepaid)

Current Liabilities

Inventory Turnover Ratio       =          Cost of Goods Sold

Average Account Receivable

Receivable Turnover Ratio =                     Sales___

 Account Receivable

Average Account Receivable  =  Opening accounts receivable + Closing accounts receivable / 2

Convert Inventory into Receivable         =     365 / Inventory Turnover Ratio

Inventory Turnover Ratio                           =      Cost of Goods Sold_______

Average Inventory During the year

Plz discuss

Attachments:

These formulas will be used in the question

Please share idea for question # 1 how to solve it which formula will be use

How to solve question # 1 i mean Current ratio minus  quick ratio and divided by current liabilities please tell me

Don't understand why you guys are not participate to solve assignment?

plz any one upload solution plz kuch samj ni aa rahi

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