Analysis Of Smithson Plc

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FINANCIAL MANAGEMENT AND CONTROL NAME – SIDDHARTH SHAH ASSIGNMENT CODE – PGBM01 BATCH CODE – MBSD51403A FIN NUMBER – G1389457X TUTOR – MANEK MUKESH TABLE OF CONTENTS 1.0 Smithson plc ………………..…………..……………………………………….. pg 03 1.1 Profitability ratio…………………………..……………………………….……. pg 03 1.2 Liquidity ratio……………………………………………………………………..pg 03 1.3 Efficiency ratio……………………………………………………………………pg 04 1.4 Gearing ratio………………………………………………………………………pg 05 2. Report to the board of Smithson plc………………………………..……………... pg 06 3. Working capital Cycle for Smithson Plc……………………………….………... pg 07 4. Investment Appraisal Tecniques……………………………………….…………. pg 08 5. Benefits and Limitations of Investment Appraisal tecniques………………...…… pg 10 6. The main sources of finance………………………………………………………. pg 13 7. Analysis on Assumptions of Break-even .……………………………….………. pg 16 8. Bibliography………………………………………………………………………. pg 17 PART A 1.) SMITHSON PLC Computation of varios ratios for interpretation : i.) Profitability Ratios: Gross Profit Ratio: Formula 2012 2013 Gross profit ×100 Sales 7300 ×100 12500 = 58.40% 7045 ×100 13850 = 50.87% Profit before interest and tax (PBIT): Formula 2012 2013 PBIT ×100 Sales…show more content…
So this facility depends on the relationship of the business with the banker. Reasonable amount of interest is been charged on the over drawn amount and is on daily basis. But in this overdraft business the banker has the right of claiming the overdraft amount from the business whenever required. This arrangement is economical for the business as the interest is charged on a daily basis unlike other options such as term loans as the interest is fixed over a period. Once cash and cheques are deposited n the account, automatically the overdraft amount would decease and interest would be charged on the lesser
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