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Study the balance sheet and answer the following questions below

 MAVOKO TRADERS
BALANCE SHEET
As at 31st Dec 2000
Fixed assets   Capital422,930 
Premises
Furniture
Machinery
Motor car
300,000
51,500
140,000
190,000
 


(681,500)

Add Net profit
Less drawings

220,500
(175,000)

 


468,450

Current Assets   LTL  
Stock
Debtors
Cash at bank
Cash at hand
124,500
103,650
54,850
3,650
 (286,650)Mortage loan
Bank loan
300,000
100,000

400,000
        


968,150 

Current liabilities  
Creditors 99,720
  968,150

   

  1. Calculate:
    1. Working Capital (WC)
    2. Return on capital (ROC)
    3. Borrowed capital
    4. Current ratio
    5. Quick ratio

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  1. Working Capital (WC) 
    WC= CA-CL
    =288,650 - 99,720= 188,930
  2. Return on capital (ROC) 
    =Net profit/capital invested x100
    220,500/422,930 x 100
    =52.13%
  3. Borrowed capital 
    =long term loan=400,000
  4. Current ratio 
    =CA/CL
    =288,650/99720 x 100
    2.89%
  5. Quick ratio 
    CA - stock/CL
    =288,650 - 124,500 x 100
           99720
    =165%
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