Allan's Repair Services Essay Example | Topics and Well Written Essays - 2250 words

Allans Repair Services - Essay ExampleMitre 10 Metcash dispenses computer hardware under this brand name. It also involves home improvement solutions for the end consumers. Metcash Ltd operates in the areas of distribution, fresh food, liquor, fast contemptible consumer goods and hardware. 2 a) Sale of goods accounting for $11517.4 million was the main source of revenue enhancement for the Metcash group. b) Cost of sales was the largest expenditure for Metcash group. It was $10435.3 million in the year 2010. c) The sum comprehensive income for the Metcash group was $229.6 million in the year 2010. d) refund on assets= Net income /Total Assets Return on assets for 2009= 203.2/3286.5 =6.18% Return on assets for 2010= 230.3/3639 =6.33% e) Gross profit tolerance= Gross profit /Revenue Gross profit margin for 2009=1116.6/11067.5 =10.09% Gross profit margin for 2010= 1172.8/11608.1 =10.10% f) thither has been a very slight improvement in the profitability of Metcash Ltd. The return on assets increased from 6.18% in 2009 to 6.33% in 2010. This can be attributed to the higher sales revenue that Metcash earned in the year 2010 compared to the revenue in the year 2009. Although Metcash purchased more assets to generate the higher revenue, the increase in revenue was more than the harmonious increase in total assets. The gross profit margin of Metcash remained relatively stable at 10.1%. This indicates that be of Metcash remained relatively stable. Even if there was an increase in the costs, it was matched by a similar increase in the selling price to retain the gross profit margin that was earned by Metcash in 2009. 3. a) The total current assets for the Metcash group were $1974.7 million in the year 2010. b) The total current liabilities for the Metcash group were $1448.4 million in the year 2010. c) Current proportion= Current Assets /Current Liabilities Current balance for 2009=1802.4/1309.8 =1.38 times Current Ratio for 2010= 1947.7/1448.4 =1.34 times d) Qu ick Ratio= Current Assets-Inventory /Current Liabilities Current Ratio for 2009= (1802.4-680.5)/1309.8 =0.86 times Quick Ratio for 2010= (1947.7-747.2)/1448.4 =0.83 times e) Liquidity dimensions measure the ability of a company to pay off its short edge debts. The current dimension of Metcash fell from 1.38 times to 1.34 times. This is due to the increase in the trade payables of Metcash Ltd. The reasons of this increase should be investigated since making timely payments to the creditors is essential to obtain trade discounts. Quick ratio includes only the most pellucid of the current assets to assess if a company can cover its current liabilities. Metcash Ltds quick ratio also fell slightly from 0.86 times in 2009 to 0.83 times in 2010. A quick ratio of less than 1 indicates that Metcash does not have ample liquid assets to cover its short term obligations. Metcash Ltds most of the cash is tied up in inventory and Metcash Ltd should take measures to improve its liquidity posit ion. f) eld inventory= (inventory/cost of sales)*365 age inventory for 2009= (680.5/9950.9)*365 =24.96 days Days inventory for 2010= (747.2/10435.3)*365 =26.14 days g) Days Debtors= (Account receivables/Revenue)*365 Days Debtors for 2009= (967.7/11067.5)*365 =31.91 days Days Debtors for 2010= (1008/11608.1)*365 =31.70 days h) The days inventory ratio indicate the number of days it takes to sell the inventory. In the case of Metcash Ltd, the inventory days increased from 24.96 days to