Beruflich Dokumente
Kultur Dokumente
ENGM-90011
Economic Analysis for Engineers
Assignment 4:
Submitted by:
Muhammad Waqas (771935)
2
My Engineering Company:
The Statement of Financial Performance for the financial year 2015/2016 and Statement of
Financial Position as on 30th June 2016 for My Engineering Company by using the provided
information is given below:
Expenses:
Consumables (Hand tools, welding gases) 13,391
Utility charges 4,900
Overheads (Salaries) 20,000
Secretarial and financial help 59,000
Rent (2800/month) 33,600
Depreciation 36,615
Stationary and other supplies 2,300
Total expenses 169,806
Operating Income 57,694
Other expenses:
Interest on bank loan 26,250
Loss on asset sale 1,000
Earnings before tax 30,444
Tax expenses 9,133
Net Income 21,311
3
Non-Current Liabilities
Bank Loan (15% interest rate) $175,000
Stockholders Equity
Owners Capital 300,000
Profits Retained, Beginning 50,290
Net income for year 21,311
71,601
371,601
Total Liabilities and Stockholders Equity 580,901
4
Assumptions:
Gross Profit:
From the Statement of Financial Performance for year 2015/2016 the Gross Profit has been
calculated to be $227,500.
For given tax rate of 30%, the company tax liability for the current year is $9,133.
Profit/Sales:
The profit/sales for the year 2015/2016 has been calculated by:
Net income
100
Sales
21311
100
503400
4.23 %
The high current ratio indicates strong short term financial health of the company. The asset
turnover ratio for the company is low since it is capitalized heavily. Overall the financial position
of company is strong but some improvements in sales and net profit margin is required.