RATIOS QUESTION BANK (CSS)
Q1:
The following information is taken from Air Mauritius Limited accounts for the
year ending 30 September 2013.
 Current Assets: inventories 15,468; trade and other receivables 65,793;
cash and cash equivalents 17,214.
 Current Liabilities: trade payables 135,921; short-term loans 40,523.
Using this simplified information:
1) Calculate the Air Mauritius current ratio.
2) Calculate the Air Mauritius acid-test ratio.
3) Comment on Air Mauritius’ liquidity.
Q2:
(All figures $000)
Gross profit (2013)
Operating profit (2013)
Revenue (2013)
Current assets (as at 31/12/13)
Inventories (as at 31/12/13)
Current liabilities (as at 31/12/13)
Ahmed
100
20
350
100
50
45
Flash
150
60
600
150
60
120
1) Calculate two profit margin ratios for both companies. Show all
working.
2) Comment on the profitability of both businesses. Should Ahmed be
pleased about the performance of his business compared to Flash
Builders? Explain your answer.
3) Calculate two liquidity ratios for both businesses.
Show all working.
4) Comment on your results.
BUSINESS ADMINISTRATION WITH SYED AHSAN ZOHAIB
RATIOS QUESTION BANK (CSS)
Q3:
$m
Value of
inventories
(31
December
2013)
Company X
Company Y
73
150
Cost of Sales
sales
revenue
2013
580
750
1,120
1,460
Capital
Nonemployed current
liabilities
1,575
2,050
500
1,025
Trade
accounts
receivable
(31
December
2013)
112
319
Both of these companies operates in the same industry – furniture manufacture.
1) Calculate for both companies:
 days’ sales in trade receivables ratio
 inventory turnover ratio
 gearing ratio
Q4:
Using the following data taken from the published accounts of two public limited
companies, calculate as many of the profitability ratios, financial efficiency ratios
and liquidity ratios for 2013 as you have information for.
(All figures in $ million.)
Company
Capital
employed
Noncurrent
liabilities
Current Current
assets
liabilities
A
3,000
1,500
1,200
1,400
B
200
50
70
70
Gross Operating
profit profit
1,10
0
75
Revenue
Inventories
750
4,000
400
25
300
35
1) Using your results, compare the performance, efficiency and liquidity of
these two businesses, which operate in the same industry.
2) Assess the limitation of the ratio analysis you have just undertaken.
BUSINESS ADMINISTRATION WITH SYED AHSAN ZOHAIB
RATIOS QUESTION BANK (CSS)
Q5:
Look at the extracts from the published accounts for Karachi Paper Products plc
and answer the questions that follow.
$m
Revenue
Cost of goods sold
Operating profit
Profit for the year
Inventories
Trade accounts
receivable
Current assets
Current liabilities
Dividends
Non-current liabilities
Capital employed
Number of shares issued
Share price
Year ending
31 October 2018
400
120
35
30
58
80
Year ending
31 October 2019
330
100
33
29
36
70
125
140
20
150
300
80m
At 31 October 2018 =
$4.00
120
120
15
120
260
80m
At 31 October 2019 =
$3.60
2018
2019
Current ratio
Acid-test ratio
Days’ sales in receivable
P/E ratio
Gearing ratio
Gross profit margin
Operating profit margin
ROCE
Dividend yield
1) Calculate the ratios from the Karachi Paper Products data provided and
complete the table.
BUSINESS ADMINISTRATION WITH SYED AHSAN ZOHAIB