Calculate and comment on the debt equity ratio, Financial Accounting

+44 141 628 6080
[email protected]

Calculate and comment on the debt equity ratio

Problem

The following data was extracted from the records of DT Ltd on 28 February 2021, the end of their financial year:

Share capital (900 000 shares at R2 par value) 1 800 000
Retained income 160 000
Non-Current Assets 1 750 000
Inventories 220 000
Receivables 600 000
Cash/Bank 300 000
Payables 730 000
Loans at 15% p.a. 180 000
Net profit after tax 765 000
Market price of share 270c
Dividends per share 65c

Task

A. Calculate and comment on each of the following ratios:

a. Current ratio (last year 2.33 : 1)

b. Acid test ratio (last year 1.58 : 1)

B. Calculate the Price Earnings (PE) ratio and explain what a low PE ratio could mean.

C. Calculate the earnings per share. Will shareholders be happy with this? Why?

D. Calculate the market to book ratio and explain the significance of this ratio.

E. Calculate and comment on the debt equity ratio.

F. Calculate the retained income for the year.

View Complete Question

Request for Solution File

Ask an Expert for Answer!!

Financial Accounting: Calculate and comment on the debt equity ratio

Reference No:- TGS03224421

Expected delivery within 24 Hours

Have a Question? (oR Write a Review)

Write atleast 100 words!!

Asked Questions

What are common methods of brand equity measurement

Brand equity can be measured in a number of ways, but the 3 most common methods are which of the following? Select all that apply.

Problem on low-cost legal aid offices

A program that requires that any interest earned on client trust accounts that are nominal or of a short duration be turned over to the state bar

Problem on business practices and consumer protection act

Which of the following statements concerning the Business Practices and Consumer Protection Act (BPCPA) is FALSE?

What you see as pros-cons associated with esg reporting

Should assurance on information be required? What do you see as the pros and cons associated with ESG reporting?

Statements about asking questions during a meeting

Which of the following statements about asking questions during a meeting is true? Question Answer

What is their qbi deduction for the year

Tara and Todd are married. Tara is a lawyer who operates her practice as a sole proprietorship. Todd works for a local architecture firm.

What amount of elige current year taxable income is

What amount of Elige's current year taxable income is allocated to Elige's S corporation short tax year based on the relative number of days

Request for Solution File

Ask an Expert for Answer!!

Financial Accounting: Calculate and comment on the debt equity ratio

Reference No:- TGS03224421

Have a Question? (oR Write a Review)

Recent Questions Asked Financial Accounting

Q : Identify financial institution and how you heard of company

Q : Evolution of theories of related problem-solving

Q : Whose fault is it if a child is obese

Q : Describe the parts of neural communication

Q : Calculate and comment on the debt equity ratio

Q : Compare worldviews - indigenous vs. western worldview

Q : Calculate the payback period and accounting rate of return

Q : What is the best use for the common-size statements

Q : How do you ensure you maintain professional boundaries