# Microsoft Word XXXXXXXXXXS3 Assignment 1 - ACC00724 ACC00724 Accounting for Managers, Assignment 1, S XXXXXXXXXXPage 1 of 1 ACC00724 (Accounting for Managers) S3, 2018 ASSIGNMENT 1 (20 MARKS) In...

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Answered Same DayDec 02, 2020Southern Cross University

## Answer To: Microsoft Word XXXXXXXXXXS3 Assignment 1 - ACC00724 ACC00724 Accounting for Managers, Assignment 1,...

Anju P answered on Dec 04 2020
Wesfarmers Limited
Calculation of Financial Ratios 2014-2018
1. Return on Total Assets [Amount in Million \$]
= Earnings before Interest and Tax/ Total Assets
= (Net Income + Tax + Interest)/ Total Assets
2014
= (1,605+939+346)/39,727
= 0.073
2015
= (2,440+1,004+315)/40,402
= 0.093
2016
= (407+631+308)/40,783
= 0.033
2017
= (2,760+1,169+248)/40,115
=
0.104
2018
= (2,604+1,246+211)/36,933
= 0.110
1. Rate of Return on ordinary equity [Amount in Million \$]
=Operating profit/Average Ordinary Equity*100
=Sales- Cost of Goods Sold- All other Expenses/Average Ordinary Equity*100
2014
= (60,181-41,424-16,274)/26,004.50*100
= 9.55%
2015
= (62,447-43,045-16,055)/25,384*100
= 13.19%
2016
= (65,981-45,525-19,459)/23,865*100
= 4.18%
2017
= (64,913-44,633-16,536)/23,445*100
= 15.97%
2018
= (66,883-45,718-17,484)/23,347.50*100
= 15.77%
1. Operating Profit Margin [Amount in Million \$]
=Operating Profit/ Total Revenue*100
2014
= 2,483/60,181*100
= 4.13%
2015
= 3,347/62,447*100
= 5.36%
2016
= 997/65,981*100
= 1.51%
2017
= 3,744/64,913*100
= 5.77%
2018
= 3,681/66,883*100
= 5.50%
1. Gross Profit Margin [Amount in Million \$]
=Gross Profit/Sales*100
2014
= 18,757/60,181*100
= 31.17%
2015
= 19,402/62,447*100
= 31.07%
2016
= 20,456/65,981*100
=31.00%
2017
= 20,280/64,913*100
= 31.24%
2018
= 21,165/66,883*100
= 31.64%
1. Inventory Turnover Period [Amount in Million \$]
=Average Inventory Held/ Cost of Goods sold*365
2014
= 5,191.50/41,424*365
= 45 days
2015
= 5,416.50/43,045*365
= 45 days
2016
= 5,878.50/45,525*365
= 47 days
2017
= 6,395/44,633*365
= 52 days
2018
= 6,270.50/45,718*365
= 50 days
1. Settlement Period for Debtors [Amount in Million \$]
= Average Accounts Receivable/Credit Sales Revenue*365
2014
= 1,962.50/60,181*365
= 12 days
2015
= 1,523.50/62,447*365
= 9 days
2016
= 1,545.50/65,981*365
= 8 days
2017
= 1,630.50/64,913*365
= 9 days
2018
= 1,645/66,883*365
= 9 days
1. Current Ratio [Amount in Million \$]
=Current Assets/ Current Liabilities
2014
= 9,311/8,229
= 1.13
2015
= 9,093/9,726
= 0.93
2016
= 9,684/10,424
= 0.93
2017
= 9,667/10,417
= 0.93
2018
= 8,706/10,025
= 0.87
1. Quick Ratio [Amount in Million \$]
= Cash+ Account Receivable/Current Liabilities
2014
= 2,067+1,584/8,229
= 0.44
2015
= 711+1,463/9,726
= 0.22
2016
= 611+1,628/10,424
= 0.21
2017
= 1,013+1,633/10,417
= 0.25
2018
= 683+1,657/10,025
= 0.23
1. Debt to Asset Ratio [Amount in Million \$]
=Total Debt/Total Asset
2014
= 13,740/39,727
= 0.35 times
2015
= 15,621/40,402
= 0.39 times
2016
= 17,834/40,783
= 0.44 times
2017
= 16,174/40,115
= 0.40 times
2018
= 14,179/36,933
= 0.38 times
1. Interest Cover Ratio [Amount in Million \$]
= Operating Profit/ Interest Expenses
2014
= 2,483/346
= 7.18 times
2015
= 3,347/315
= 10.63 times
2016
= 997/308
=3.24 times
2017
= 3,744/248
=15.10 times
2018
= 3,681/211
= 17.45 times
1. Assets Turnover [Amount in Million \$]
=Net Sales/Average total Assets
2014
= 60181/41441
=1.45 times
2015
= 62447/40064.50
=1.56 times
2016
= 65981/40592.50
=1.63 times
2017
= 64913/40449
=1.60 times
2018
= 66883/38524
=1.74 times
1. Earnings per Share[earnings and no.of shares in thousands]
=Earnings available to ordinary shareholders/no. of ordinary shares in issue
2014
= 2689000/1143275
= \$ 2.35
2015
= 2440000/1123753
= 2.17
2016
=407000/1126131
= 0.36
2017
= 2873000/1133840
= 2.53
2018
= 1197000/1133840
= 1.06
1. Price Earnings Ratio
=Market Price per Share/Earnings per share
2014
= 42.58/2.35
= 18.12 times
2015
= 39.03/2.17
= 17.99 times
2016
= 40.10/0.36
=111.39 times
2017
=...
SOLUTION.PDF