## Financial efficiency ratios - numerical questions

#### Question 1

The following data has been extracted from the accounts of a company.

Year (\$k) 1 2 3 4 5
Net capital employed 2,000 2,200 2,000 2,500 2,700
Sales revenue 10,000 11,000 11,000 10,000 12,000
Cost of sales 6,000 6,500 7,000 5,500 6,000
Stocks 1,000 1,000 1,500 1,000 800
Debtors 1,500 1,500 1,800 2,000 1,500

1. Calculate the asset turnover ratio, the stock turnover ratio, and debtor's days for the company over the five year period.
2. Analyse the results and comment on your findings.

#### Question 2

The following information is available for the last two years.

For year ended 31 March 2010 For year ended 31 March 2011
\$ \$
Turnover 125,000 160,000
Purchases 80,000 128,000
As at 31 March 2010 As at 31 March 2011
Balance at bank 8,000 4,000

1. Calculate both the debtors' collection period and the creditors' payment period for each of the two years. State the formulae used.
2. Calculate the acid test ratio for each of the two years. State the formulae used.