Mohammed Gazanfar

Student No--01429

Q1]Ratios calculation for BNP company

A) Current ratio:- Current assets/Current liabilities

Year 2007 2008 2009

Calculation $ 20,000/$ $ 35000/$ 20,000 $ 50,000/$ 25,000
10,000
Result 2 1.75 2

B) Liquid ratio:- Current assets -inventory /Current liabilities-bank over draft

Year 2007 2008 2009

Calculation $ 5000/ $ 2500/ $ 35,000
Result

C) Gross profit ratio:- Gross profit / sales

Year 2007 2008 2009

Calculation $ 45,000/$ $ 75,000/$ $ 95,000/$
100,000 150,000 200,000
Result 0.45 0.5 0.475

D) Net profit ratio:- Net profit after tax / sales

Year 2007 2008 2009

Calculation $ 7000/$ 100,000 $ 10,500/$ $ 14,000/$
150.000 200,000
Result 0.07 0.07 0.07

E) Credit sales/average accounts receivable

Year 2007 2008 2009

Calculation $ 100,000/$ 8000 $ 150,000/$ 5000 $ 200,000/$
10,000
Result 12.5 30 20

F) Inventory turnover rate:- Cost of goods sold/Average inventory

Year 2007 2008 2009

Calculation $ 55,000/$ 5000 $ 75,000/$ 15,000 $ 105,000/30,000
Result 11 5 3.5

G) Return on equity:- net profit after tax / owners equity

 Mohammed Gazanfar
Student No--01429

Year 2007 2008 2009

Calculation $ 7000/$ 20,000 $ 10,500/$ 35,000 $ 14,000/$ 55,000
Result 0.35 0.3 0.254

H) Debt to equity:-External liabilities/owners equity

Year 2007 2008 2009

Calculation $ 30,000/$ 20,000 $ 54,000/$ 35,000 $ 55,000/$ 55,000
Result 1.5 1.28 1

I) Total assets turnover:-Total sales/total assets

Year 2007 2008 2009

Calculation $ 100,000/$ $ 150,000/$ $ 200,000/$
50,000 80,000 110,000
Result 2 1.875 1.81

J) Return on investment:- Net profit after tax/total assets

Year 2007 2008 2009

Calculation $ 7000/$ 50,000 $ 10,500/$ 80,000 $ 14,000/110,000
Result 0.14 0.131 0.127

Q2) Solution

New machine Calculation Old machine Calculation

Cost $ 200,000 Cost --------
Tax effect of Tax effect of
deprecation deprecation 34,117.20
200,000-0=40,000 45,489.60 240,000=30,000
5 8
40,000x30x3.7908 30,000x30x3.7908
Maintenance Maintenance
500x3.7908x30 568.62 1000x3.7908x30 1137.24
Saving Saving NIL
Tax effect on saving Tax effect on saving NIL
10,000x3.7908x30 (11372.400)

129301.58 31463.64
Mohammed Gazanfar
Student No--01429

Q3.solution for HMC manufacturing

1] Latest technology should provide to the staff members they can exchange
information at the same time.

2] Company should create email ID with notification facility for each staff members.

3] New technology training should provide to all staff members

4] There should be a man terminal so that the email could be accessible form any
computer

5] Make an agenda of the meeting and let the every staff members know about the
agenda of meeting