# Accounting assignment

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1.- Return of capitam elpoyed
Fromula:
NP before interest and tax | x 100 |
Total assets - current liabilities | |

2004 | | | | | 2005 | | | |
| | | | | | | ||
| | | | | | | | |
| | | | | | | | |
310,000 | x100 = | 19,375 | % | | 350,000 | x100= | 20,58 | % |
1,600.000 | | | | | 1,700.000 | | | |

Result: 19%Result: 21%

Coment:

Return on Capital Employed (ROCE) - measures the overall earning power of all the funds used in the business. Its main purpose is to indicate how effectively management areusing the funds invested in the business to generate profit.
Hence, based on the result above obtained, we can clrearly see that the firm is performing better in the current year 2005 comparing to 2004because for each dollar invested in the business, it generates profit of 20,58% which can be rounded to 21% whereas in 2004, the profit was lesser, exactly 19,375% which can be rounded to 19% .moreover, taking other issues into consideration regarding to the net profit which appears to be greater as well comparing to 2004.

2.- Gross Profit Margin Ratio

Formula:
Gross Profit | x100 || | | | |
Net Sales | | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
2,004 | | | | | 2,005 | | |
| | || | | | |
| | | | | | | |
| | | | | | | |
1,040.000 | x100= | 40% | | | 1,150.000 | x100 = | 32,9 % |
2,600.000 | | | | | 3,500.000 | | |

Result: 40% Result:33%

Coments:

Gross profit ratio- measures how much profit the business earned in relation to the amount of sales it has made. This ratio enable us to judged how successful the entity hasbeen at trading.
Therefore, based on the figures above, there’s a comparison of the performance of Harridges Limited among two years 2004 and 2005. Even though in 2005 the firm had higher gross...