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    Spring 2024 - ACC501 - 1

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    freebutterfly121
    The document provides instructions for an assignment calculating and interpreting liquidity and profitability ratios for Ali Corporation based on its balance sheet and income statement for 2023. Students must compute current ratio, quick ratio, net profit margin, return on assets, and return on equity and comment on the company's liquidity and profitability by comparing the results to industry averages.

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    Spring 2024 - ACC501 - 1

    Uploaded by

    freebutterfly121
    29 views3 pages
    The document provides instructions for an assignment calculating and interpreting liquidity and profitability ratios for Ali Corporation based on its balance sheet and income statement for 2023. Students must compute current ratio, quick ratio, net profit margin, return on assets, and return on equity and comment on the company's liquidity and profitability by comparing the results to industry averages.

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    Spring 2024_ACC501_1

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    The document provides instructions for an assignment calculating and interpreting liquidity and profitability ratios for Ali Corporation based on its balance sheet and income statement for 2023. Students must compute current ratio, quick ratio, net profit margin, return on assets, and return on equity and comment on the company's liquidity and profitability by comparing the results to industry averages.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    29 views3 pages

    Spring 2024 - ACC501 - 1

    Uploaded by

    freebutterfly121
    The document provides instructions for an assignment calculating and interpreting liquidity and profitability ratios for Ali Corporation based on its balance sheet and income statement for 2023. Students must compute current ratio, quick ratio, net profit margin, return on assets, and return on equity and comment on the company's liquidity and profitability by comparing the results to industry averages.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 3

    SEMESTER – SPRING 2024

    BUSINESS FINANCE (ACC501)


    ASSIGNMENT
    DUE DATE: 17TH MAY 2024 MARKS: 15

    Learning Outcomes
    After attempting this assignment, the students will be able to calculate and interpret a company's liquidity and
    profitability position.

    Question:
    Below is the Balance Sheet and Income Statement of Ali Corporation for the year ended December 31, 2023.

    Ali Corporation
    Balance Sheet
    As of December 31, 2023
    Rs. Liabilities & Rs.
    Assets
    (Millions) Shareholders’ Equity (Millions)
    Cash 550 Accounts Payable 300
    Account Receivables 250 Notes Payable 600
    Inventory 1,200 Long-term Debt 550
    Operating Fixed assets 2,950 Common Stock 1,000
    Capital Surplus 750
    Retained Earnings 350
    Acc. Depreciation 1,400
    Total 4,950 Total 4,950

    Ali Corporation
    Income Statement
    For the year ended December 31, 2023
    Rs. (Millions)
    Sales 6,800
    Cost of Goods Sold 4,500
    Administrative Expenses 950
    Depreciation 500
    EBIT 850
    Interest Expense 40
    Taxable Income 810
    Taxes 70
    Net Income 740
    Dividends 390
    Addition to Retained Earnings 350
    Other Information
    No. of Shares Outstanding 1,000
    Price per share 5.12
    Required:

    a) Based on the above financial statements of Ali Corporation, compute the following ratios.
    (Provide complete calculation for each ratio) (10 Marks)
    a) Current ratio
    b) Quick ratio
    c) Net Profit Margin
    d) Return on Assets
    e) Return on Equity

    b) Based on the above results, comment on the liquidity and profitability of the company by comparing your
    results with the following industry averages: (5 Marks)
    Sr. # Ratios Industry Averages
    1 Current Ratio 2.5 times
    2 Quick Ratio 1.2 time
    3 Net Profit Margin 30%
    4 Return on Assets 10%
    5 Return on Equity 25%
    Note:

    ✓ While commenting on liquidity and profitability, you must categorically mention the ratios related to
    liquidity and profitability.

    ✓ Complete calculations are required for every part of the questions. Incomplete calculations may result in
    loss of marks.

    IMPORTANT

    24 hours extra/grace period after the due date is usually available to overcome uploading
    difficulties. This extra time should only be used to meet the emergencies and the above-
    mentioned due dates should always be treated as final to avoid any inconvenience.

    IMPORTANT/SPECIAL INSTRUCTIONS/SOLUTION GUIDELINES:


    BE NEAT IN YOUR PRESENTATION
    DEADLINE
    • Make sure to upload the solution file before the due date on VULMS.
    • Any submission made via email after the due date will not be accepted.

    FORMATTING GUIDELINES
    • Use the font style “Times New Roman” or “Arial” and font size “12”.
    • It is advised to compose your document in MS-Word format.
    • You may also compose your assignment in Open Office format.
    • Use black and blue font colors only.
    REFERENCING GUIDELINES
    • Use APA style for referencing and citation. For guidance search “APA reference style” in
    Google and read various websites containing information for better understanding or visit
    http://linguistics.byu.edu/faculty/henrichsenl/apa/APA01.html

    RULES FOR MARKING


    Please note that your assignment will not be graded or graded as Zero (0), if:
    • It is submitted after the due date.
    • The file you uploaded does not open or is corrupt.
    • It is in any format other than MS-Word or Open Office, e.g. Excel, PowerPoint, PDF etc.
    • It is cheated or copied from other students, internet, books, journals etc.

    Note related to load shedding: Please be proactive.

    Dear students!
    As you know that pre Mid-Term semester activities have started and load shedding
    problem is also prevailing in our country. Keeping in view the fact, you all are
    advised to post your activities as early as possible without waiting for the due date.
    For your convenience, activity schedule has already been uploaded on VULMS for
    the current semester, therefore no excuse will be entertained after due date of
    assignments or GDBs.

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