Analyse the profitability the liquidity and the gearing of


Sessegnon Ltd Income Statement for the year ended 31 December 2011

 

£000s

£000s

Sales

 

1,690

Cost of Sales

 

1,252

Gross Profit

 

   438

Admin expenses

144

 

Depreciation

170

 

Loss on sale of machinery

  60

374

Operating Profit

 

  64

Interest payable

 

  32

Profit Before Tax

 

  32

Tax

 

  10

Profit After Tax

 

  22

 

Sessegnon Ltd Balance Sheet as at 31 December 2011

 

2011

2011

2010

2010

 

£000s

£000s

£000s

£000s

Non-Current Assets NBV

 

 4500

 

3274

Current Assets

 

 

 

 

          Inventory

136

 

148

 

          Receivables

160

 

190

 

          Cash at Bank

-

  296

180

  518

Total Assets

 

4796

 

3792

Non-Current Liabilities

 

 

 

 

          Bank Loan

1500

 

640

 

Current Liabilities

 

 

 

 

          Trade Payables

192

 

155

 

          Taxation

  15

 

  60

 

          Interest Payable

  10

 

    7

 

          Bank Overdraft

115                        332

 

    -                 222

 

Total Liabilities

 

1832

 

  862

Net Assets

 

2964

 

2930

Equity

 

 

 

 

          Share Capital

 

1000

 

950

          Share Premium Account

 

    30

 

  20

          Retained Earnings

 

1934

 

    1960

 

 

2964

 

2930

 

Notes

1.    Dividends were paid during the year

2.    The assets disposed of had a book value of £260,000

Question 2

Prepare a cashflow statement for the year ended 31 December 2011 and describe what it tells us.

Question 3

Analyse the profitability, the liquidity and the gearing of Sessegnon Ltd based on the information above and using appropriate financial ratios. Would a new supplier be willing to give them credit?

 

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Financial Accounting: Analyse the profitability the liquidity and the gearing of
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