# Financial Statements

Dr Philip E Dunn has set some multiple choice questions on the interpretation of financial statements.

The following is a summary of the Financial Statements of Hawsker
Feeds Ltd for the Year Ended 31 December X20.

## Statement of Profit or Loss

Additional information: cost of sales, distribution and admin expenses include: wages, salaries and employee costs £1.27m. Bought in materials and services £4.40m and depreciation £0.24m.

Number of Employees 35.

## Statement of Financial Position

(1) Calculate the Return on Capital Employed:
(a) 12.00%
(b) 19.06%
(c) 17.05%
(d) 24.25%

(2) Calculate The Asset Turnover:
(a) 1.18
(b) 1.85
(c) 1.46
(d) 1.72

(3) Calculate the Operating Profit as a % of Turnover:
(a) 11.91%
(b) 41.18%
(c) 8.38%
(d) 13.09%

(4) Calculate the Current Ratio:
(a) 1.80:1
(b) 1.15:1
(c) 1.67:1
(d) 1.63:1

(5) Calculate the Acid Test (Quick Ratio):
(a) 1.67:1
(b) 1.13:1
(c) 1.53:1
(d) 1.63:1

(6) Calculate The Inventory holding period in days:
(a) 35.82 days
(b) 31.13 days
(c) 52.93 days
(d) 75.60 days

(7) Calculate the Trade Receivables’ collection period:
(a) 63.34 days
(b) 107.68 days
(c) 72.88 days
(d) 74.90 days

(8) Calculate Trade Payables’ payment period:
(a) 109.50 days
(b) 53.32 days
(c) 51.88 days
(d) 76.65 days

(9) Calculate the Interest Cover:
(a) 11.13
(b) 35
(c) 7.13
(d) 10.13

(10) Calculate the Gearing Ratio:
(a) 27.24%
(b) 21.05%
(c) 17.39%
(d) 21.41%

(11) Calculate the return on Shareholders’ Funds:
(a) 13.97%
(b) 21.21%
(c) 22.07%
(d) 15.53%

(12) Calculate Value Added per £ of Employee Costs:
(a) 4.21
(b) 1.89
(c) 2.70
(d) 0.86

(13) Calculate Value Added per Employee:
(a) £80,000
(b) £114,286
(c) £68,571
(d) 25,429

(1) B

(2) C

(3) D

(4) C

(5) B

(6) C

(7) A

(8) D

(9) A

(10) D

(11) D

(12) B

(13) C