Give a commentary for 2 year (2016-2015) of soup restaurant include: _trade rece

Question

Give a commentary for 2 year (2016-2015) of soup restaurant include: _trade receivable turnover (days) _trade payable's turnover _inventory turnover (days) _gearing ratio _EPS (cent)
More than 1000 words Thank you so much

Font Tools Table a soup restaurant vy 2.docx - Search in Document h Home Layout Document ElementsT Tables Charts SmartArt Times New Roman 16 16 ? Text Box Themes Ratio Formula 2016 (S 2015 Efficiency Trade Receivable's Turnover (days) Average Trade Receivables Credit Sales 3,900,007 38,352,568 4,252,455 40.955.766 x10096 x365 365 = 38 days = 38 days Trade Payable's Turnover Average Trade Payables 4,426,897 x 365 8.711.376×365 | 4,481,420 9,435,813 × 365 - 186 days -174 days Average Inventory Purchases & other consumables x 365 194,306.5 Inventory Turnover (days) x 365 8,711,376x 365 481,420 9,435,813 - 9 days -8 days Investment Gearing Ratio 280,170 Non-current liabilities 261,654 hare capital + Reserves +Non CL 9073,098 +261654 10,296,436+ 280,170 x100c × 100% 100% 2.65% -208% -EPS profit atributableordinary shareTatders ?96505 x100c No.of ordinary shares outstanding 298,500,000298,50000 (cents) 100c 0.33 0.32c ?-E | | Print Layout View Sec 1 Pages:6 of 8 108%

Explanation / Answer

1. The receivables turnover ratio indicates the efficiency with which a firm collects on the credit it issues to customers. A high receivables turnover ratio can indicate that the company’s collection of accounts receivable is efficient and that the company has a high proportion of quality customers that pay off their debts quickly, whereas a  low ratio may indicate that company may have poor collecting processes, a bad credit policy or none at all, or bad customers or customers with financial difficulty. Here The Receivable Turnover Ratio of Co. in both year 2015 and 2016 is same i.e 38 Days. It Seems that the Company is in a stable position in maintaining its Receivable Ratio to 38 Days, it implies that Co. is Good at Managing the Debtors faster and better.

2.Trade Payable Turnover shows investors how many times per period the company pays its average payable amount. The company on an average takes 174 days in 2015 to pay off its trade payable which increases to 186 days in 2016, it shows that the company is taking a longer period of time to pay off its Trade Payable as Compared to Previous Year.

3. Inventory Turnover measures how fast a company is maintaining inventory and is generally compared to industry averages. In this Case, the Inventory Turnover Ratio is 8 days in 2015 which turns to increase to 9 days in 2016 indicates that Co. increases the Investment in Inventory.

4. Gearing Ratio is a measurement of the entity’s financial leverage, which demonstrates the degree to which a firm's activities are funded by owner's funds versus creditor's funds. In the Current situation, the Gearing ratio of the company has been fallen from 2.65% in the year 2015 to 2.06% in the year 2016. It Indicates that the Company has reduced its dependency on debts over the year.

5.Earnings per share serve as an indicator of a company's profitability. It is generally considered to be the single most important variable in determining a share's price. In the Context of the Company, EPS was .32 in 2015 which increases to .33 in 2016. It Indicates that the Company has increased its earnings over the year with more profits available for equity shareholders.

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