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Calculate receivables collection period and current ratio

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Reference no: EM131449784 , Length: word count:2000

Building High Performance Organisations Assignment

An investor is considering the purchase of shares in either Wallace or Gromit. Both companies are in the same business sector and their accounts attached:

REQUIRED:

(a) Calculate the following six ratios for both companies, clearly showing the ratio formula and figures used: -

(i) Current ratio

(ii) Quick ratio (acid test ratio)

(iii) Receivables collection period

(iv) Return on capital employed

(v) Gross profit percentage

(vi) Net profit percentage

(b) Using the ratios calculated in part (a) prepare a report for the investor providing comments on the performance and position of Wallace and Gromit.

(c) Suggest what further information might be useful to the potential investor before they decide in which company to invest.

(d) It has been rumoured that Gromit is planning an expansion of their production facilities which will cost £2.5million. Discuss how this might be financed and any problems associated with the methods you have chosen.

Attachment:- Assignment File.rar

Verified Expert

The paper is about taking an investment decision and sources of financing an expansion plan. The problem asked about to help an investor to invest in the shares of either of the two companies Wallace or Gromit. For this, we have calculated and analyse various financial ratios of both the companies. It is clear from our analysis that both the performance and position of Wallace is better than that of Gromit. So it is advisable to invest in the shares of Wallace. After that we discussed about some factors other than financial ratios which needs to be considered before making any investment decision. At last, we discussed about various sources of financing an expansion plan and the related issues with the respective sources.

Reference no: EM131449784

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len1449784

4/3/2017 8:54:12 AM

Australian student, 2000 words + numericals, Remember that Referencing is APA 6th please, This document provides the assignment brief, specification and assessment criteria for your first assessment on the module: Building High Performance Organisations. Your response can be no longer than 2,000 words (excluding references and appendices). Your submission should use single line spacing. Up to a maximum of 3 appendices are permitted. Where appropriate your work must be properly referenced and include a reference list (a bibliography is not required).

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