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calculate performance measurement formulas:

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › calculate performance measurement formulas:

  • This topic has 1 reply, 2 voices, and was last updated 6 years ago by John Moffat.
Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • January 12, 2017 at 4:44 pm #366177
    preetgarcha
    Member
    • Topics: 5
    • Replies: 4
    • ☆

    Bumbles Retail Co. sells a range of luxury organic food products to hotels and restaurants. The following information has been extracted from the management accounts:

    $
    Sales revenue
    600,250
    Cost of goods sold
    296,875
    Net profit
    102,000
    Average Capital employed
    927,045
    Period end inventory balance
    45,890
    Period end receivables balance
    100,265
    Period end cash balance
    28,900
    Period end current liabilities balance
    110,590
    Total number of transactions during the year
    12,500
    (a) Calculate the following key financial performance measures for Bumbles Retail Co:

    (i) Average sales transaction value (1 mark) ?

    (ii) Gross profit margin (1 mark) ok

    (iii) Net profit margin (1 mark) ok

    (iv) Return on capital employed (1.5 marks)ok

    (v) Current ratio (1 mark)? current assets/ current liabilities, still didn’t get correct answer

    (vi) Acid test (quick) ratio (1 mark)? current assets-inventories/ current liabilities, no correct answer

    (vii) Receivables days (1.5 marks)ok

    January 12, 2017 at 5:07 pm #366183
    John Moffat
    Keymaster
    • Topics: 56
    • Replies: 51576
    • ☆☆☆☆☆

    Please do not set test questions and expect an answer!!

    You must have an answer in the same book in which you found the question, and so you should use this forum to ask about which part of the answer you do not understand – then I will try and help you.

    The average sales transaction value is the total sales revenue divided by the total number of transactions.

    The current ratio is the period end current assets (inventory plus receivables plus cash) divided by the period end current liabilities.

    The acid test ratio is the same as the current ratio, but leaving out the inventory.

    Have you watched my free lectures on this? The lectures are a complete free course for Paper F2 and cover everything needed to be able to pass the exam well.

  • Author
    Posts
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