Company 1: In 2013, Coolgardie's return on assets decreased to 15.42% from 23.78% in 2012 due to a drop in profit and increased assets. The net profit margin also decreased from 19.83% to 13.92% as expenses increased more than revenue. Company 2: In 2010, Billie's Bakery had higher liquidity and profitability ratios compared to 2009. The debt to equity ratio was lower in 2010 at 0.39 compared to 0.41 in 2009. NSW Ltd and QLD Ltd: In the current year, NSW Ltd had higher returns and shorter days for inventory and debtors compared to QLD Ltd, while their current and liquid

1. Company 1: Coolgardie Pty Ltd
a)
2013 ($000) 2012 ($000)
Return On Total Assets =(159+8)/1083*100 =(234/984)*100
=(Return/total Assets)*100 =15.42013 =23.7805
=15.42% =23.78%
Net Profit Margin =(167/1200)*100 =(234/1180)*100
= (Net Profit/Sales)*100 =13.9167 =19.8305
=13.92% =19.83%
Gross Profit Margin =(450/1200)*100 =(500/1180)*100
= (Gross Profit/ Sales)*100 =37.5% =1.23684
=1.24%
Liquid Ratio =(396+236)/238 =(282+148)/228
= (Current Assets-Inventory)/Current =2.65546 =1.88596
Liabilities =2.66:1 =1.89:1
Average Settlement period for accounts =(((156+102)/2)/1200)*365 =(102/1180)*365
receivable =39.2375 =31.5508
= (average debtors/ credit sales)*365 =39.24% =31.55%
Average Settlement period for accounts =(((76+60)/2)/838)*365 =(282/680)*365
payable =29.6181 =151.368
=(average creditors/ credit purchases)*365 =29.62% =151.37%
b)
In 2013 Coolgardie produced 15.42 cents in profit before tax for every dollar invested in
assets compared with 23.78 cents in 2012. The decrease is caused by a drop in profit and
an increased investment base
For 2013, each dollar of sales revenue produced 13.92 cents in profits. This is much
lower than the 2012 profit ratio as being a result that in 2013 sales increased but the
expenses increased by more than the revenue causing a lower profit margin
c)

2. Company 2: Billie’s Bakery Pty Ltd
a)
2010 ($000) 2009 ($000)
Current Ratio =(30+18+12)/15 =(20+20+16)/25
=Current Assets/ Current Liabilities =4:1 =2.24:1
Liquid Ratio =(60-12)/15 =(56-16)/25
=(Current Assets- Inventory)/ Current Liabilities =3.2:1 =1.6:1
Days Inventory =(((12+16)/2)/300)*365 =(16/360)*365
=(Average Inventory/ Cost Of Sales)*365 =17.0333 =16.2222
=17.033 days =16.22 days
Days Debtors =(((18+20)/2)/480)*365 =(25+50)/183
=(Average Debtors/ Credit Sales)*365 =14.4479 =247.925
=14.45 days =247.93 days
Debt to Equity =(15+50)/165 =(25+50)/183
=(Current Liabilities + Non Current =0.39394 =0.40984
Liabilities)/Equity =0.39 =0.41
Profit Margin =((94+6)/480)*100 =((71+4)/530)*100
=(Net Profit before Interest and Tax/ Sales)*100 =20.8333 =14.1509
=20.83% =14.15%
Return Of Assets =(100/230)*100 =(75/258)*100
=(Return/ Total Assets)*100 =43.4783 =29.0698
=43.48% =29.07%
Return on Equity =73/((165+183)/2)*100 =(53/183)*100
=(Net Profit after tax/ Average Equity)*100 =41.954 =28.9617
=41.95% =28.96%
b)

3. Company: NSW Ltd & QLD Ltd
a)
NSW QLD
Current Ratio =223875/90000 =165375/67500
=Current Assets/ =2.4875 =2.45
Current Liabilities =2.49:1 =2.45:1
Liquid Ratio =(223875-91125)/90000 =(165375-64125)/67500
= (Current Assets- =1.475 =1.5
Inventory)/ Current =1.48:1 =1.5:1
Liabilities
Days Inventory =(((84375+91125)/2)/572852)*365 =(((57375+64125)/2)/431325)*365
= (Average =55.91104 =51.40845
Inventory/ Cost Of =55.91 days =51.41 days
Sales)*365
Days Debtors =(((99000+108000)/2)/855000)*365 =(((74250+79875)/2)/431325)*365
= (Average Debtors/ =44.18421 =65.21257
Credit Sales)*365 =44.18 days =65.21 days
b)
c)
NSW QLD
Return Of Assets =(65250/((573750+596250)/2)*100) =(38250/((465750+479250)/2)*100)
= (Return/ Total =11.15385 =8.095238
Assets)*100 =11.15% =8.10%
Return on Equity =(65250/371250)*100 =(38250/299250)*100
= (Net Profit after =17.57576 =12.78195
tax/ Average =17.58% =12.79%
Equity)*100
d)
e)