Calculate and present financial ratios from a set of account

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Reference no: EM133619345

Assignment

Question I. After completing the previous activity, your supervisor, asked you to interpretation of financial statements using financial ratios for omega company.

Omega Bookshop Income Statement-comparative statements
	December 31.2021	December 31.2022
Net Sale	3640	4990
Cost of goods sold	(1920)	(2640)
Gross profit	1720	2350
Operating expenses (OPEX):
Salaries and wages expenses	900	1150
Supplies expenses	200	300
Rent expenses	300	400
Utilities expenses	200	300
Total operating expenses	(1600)	(2150)
Income before interest and tax	120	200
Interest expenses	(20)	(40)
Income before tax	100	160
Tax (25%)	(25)	(40)
Net Income (Net loss)	75	120

Omega company Financial position- Years ended December 31,2021 and 2022
Item	2021	2022
Assets
Current Assets
Cash & Cash equivalent	50	72
Accounts Receivable	180	190
Merchandising inventory	250	320
Prepaid expense's	10	18
Total current Assets	490	600
Long term investment	200	180
Property plant & equipment (PP&E)	900	1004
Total Assets	1590	1784
Liabilities
Accounts payable	90	235
salaries payable	25	30
Tax payable	25	35
Total current liabilities	140	300
Long term Liabilities	250	250
Total liabilities	390	550
Stockholders' Equity
Common stock	900	1050
Retained earning	300	184
Total stockholders' Equity	1200	1234
Total Equity & Liabilities	1590	1784

Additional Information:

1. The number of shares equal 500 shares
2. The market value per share on 12/31/2022 amounted to 1.50

Question II. Use the calculated financial ratio below, compare the performance of al-Aqsa company between 2022 and 2021:

	2021	2022	Industry Average
Current ratio	1.2	1.1	2
Quick ratio	0.76	0.8	1.25
Inventory turnover	0.8	0.7	1.6
average collection period	98	87	64
Profit margin	1.5%	2.1%	5.2%
Return on assets	4.5%	6.5%	1.1%
Return on equity	6.4%	9.0%	2.6%

Calculate and present financial ratios from a set of final accounts to compare the performance of the organisation for 2021 and 2022. Then Evaluate the performance of the organisation over this time period using the financial ratios with reference to relevant benchmarks.

Finally, critically evaluate financial statements to assess organisational performance using a range of measures and benchmarks and make conclusions. Your conclusions should be well-founded and backed by justified reasoning based on the assessment of financial data.

Reference no: EM133619345

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