(10) Shedz is a business that sells garden sheds and other wooden buildings. The sheds...
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Finance
(10)
Shedz is a business that sells garden sheds and other wooden buildings. The sheds are sold online and they are delivered to customers using the companys vehicles.
The owner, Clare, has given you some information about the financial performance of the business. She has asked you to analyse this information using ratio analysis.
Extract of Financial Information for Shedz
|
|
|
| Cost of sales | 195 000 |
| Gross profit | 65 000 |
| Expenses | 13 000 |
| Capital employed | 416 000 |
| Opening inventory | 42 000 |
| Closing inventory | 36 000 |
(A) Calculate your gross profit margin ratio, show your working.
(B) Calculate the profit margin ratio, show your working
(C) Calculate the inventory turnover ratio
Shedz must depreciate the value of the vehicles in its accounts.
(d) Discuss the advantages and disadvantages of using the reducing balance method to depreciate the value of the vehicles in its accounts.
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You can see the logs in the Dashboard.