ExpertThis question is part of a case study — click to read the full scenario(Case 51)
Scenario: Solaris Grid PLC operates in the renewable energy sector. Extracts from the financial statements for the year ended 31 December 20X5 (with 20X4 comparatives) are as follows:
Revenue: 20X5 $2,500,000; 20X4 $2,000,000.
Cost of Sales: 20X5 $1,600,000; 20X4 $1,200,000.
Operating Profit: 20X5 $450,000; 20X4 $400,000.
Finance Costs: 20X5 $50,000; 20X4 $40,000.
Equity: 20X5 $1,800,000; 20X4 $1,500,000.
Non-current Liabilities (10% Loan Notes): 20X5 $500,000; 20X4 $400,000.
Inventory: 20X5 $250,000; 20X4 $180,000.
Trade Receivables: 20X5 $300,000; 20X4 $220,000.
Trade Payables: 20X5 $210,000; 20X4 $150,000.
Assume a 365-day year.
Question: What is the Gross Profit for 20X5? (Enter numbers only)
ACCA · Question 63 · Interpretation of Financial Statements
Scenario: Solaris Grid PLC operates in the renewable energy sector. Extracts from the financial statements for the year ended 31 December 20X5 (with 20X4 comparatives) are as follows:
Revenue: 20X5 $2,500,000; 20X4 $2,000,000.
Cost of Sales: 20X5 $1,600,000; 20X4 $1,200,000.
Operating Profit: 20X5 $450,000; 20X4 $400,000.
Finance Costs: 20X5 $50,000; 20X4 $40,000.
Equity: 20X5 $1,800,000; 20X4 $1,500,000.
Non-current Liabilities (10% Loan Notes): 20X5 $500,000; 20X4 $400,000.
Inventory: 20X5 $250,000; 20X4 $180,000.
Trade Receivables: 20X5 $300,000; 20X4 $220,000.
Trade Payables: 20X5 $210,000; 20X4 $150,000.
Assume a 365-day year.
Question: Comparing 20X5 to 20X4, what has happened to the Current Ratio?
Scenario: Solaris Grid PLC operates in the renewable energy sector. Extracts from the financial statements for the year ended 31 December 20X5 (with 20X4 comparatives) are as follows:
Revenue: 20X5 $2,500,000; 20X4 $2,000,000.
Cost of Sales: 20X5 $1,600,000; 20X4 $1,200,000.
Operating Profit: 20X5 $450,000; 20X4 $400,000.
Finance Costs: 20X5 $50,000; 20X4 $40,000.
Equity: 20X5 $1,800,000; 20X4 $1,500,000.
Non-current Liabilities (10% Loan Notes): 20X5 $500,000; 20X4 $400,000.
Inventory: 20X5 $250,000; 20X4 $180,000.
Trade Receivables: 20X5 $300,000; 20X4 $220,000.
Trade Payables: 20X5 $210,000; 20X4 $150,000.
Assume a 365-day year.
Question: Comparing 20X5 to 20X4, what has happened to the Current Ratio?
Answer options:
It has increased from 2.62 to 2.67.
It has decreased from 2.67 to 2.62.
It has remained constant.
It has decreased from 3.0 to 2.62.
How to approach this question
Full Answer
Common mistakes
Practice the full ACCA FA — Financial Accounting Practice Exam 4
65 questions · hints · full answers · grading