Allan's Repair Services Essay Example | Topics and Well Written Essays - 2250 words

Allans Repair Services - Essay ExampleMitre 10 Metcash sells hardware under this brand name. It overly involves home improvement solutions for the end consumers. Metcash Ltd operates in the areas of distribution, fresh food, liquor, fast moving consumer goods and hardware. 2 a) Sale of goods accounting for $11517.4 million was the main source of revenue for the Metcash group. b) be of sales was the largest expense for Metcash group. It was $10435.3 million in the year 2010. c) The total comprehensive income for the Metcash group was $229.6 million in the year 2010. d) Return on assets= Net income / centre Assets Return on assets for 2009= 203.2/3286.5 =6.18% Return on assets for 2010= 230.3/3639 =6.33% e) Gross good margin= Gross profit /Revenue Gross profit margin for 2009=1116.6/11067.5 =10.09% Gross profit margin for 2010= 1172.8/11608.1 =10.10% f) There has been a very slight improvement in the profitability of Metcash Ltd. The return on assets increased from 6.18% in 2009 to 6.33% in 2010. This can be attributed to the higher sales revenue that Metcash earned in the year 2010 compared to the revenue in the year 2009. Although Metcash purchased more assets to generate the higher revenue, the increase in revenue was more than the proportionate increase in total assets. The gross profit margin of Metcash remained relatively stable at 10.1%. This indicates that costs of Metcash remained relatively stable. Even if in that respect was an increase in the costs, it was matched by a similar increase in the selling price to retain the gross profit margin that was earned by Metcash in 2009. 3. a) The total current assets for the Metcash group were $1974.7 million in the year 2010. b) The total current liabilities for the Metcash group were $1448.4 million in the year 2010. c) Current dimension= Current Assets /Current Liabilities Current Ratio for 2009=1802.4/1309.8 =1.38 time Current Ratio for 2010= 1947.7/1448.4 =1.34 times d) Quick Ratio= Current Assets-Inv entory /Current Liabilities Current Ratio for 2009= (1802.4-680.5)/1309.8 =0.86 times Quick Ratio for 2010= (1947.7-747.2)/1448.4 =0.83 times e) Liquidity ratios measure the ability of a company to pay off its con term debts. The current ratio of Metcash discharge from 1.38 times to 1.34 times. This is due to the increase in the trade payables of Metcash Ltd. The reasons of this increase should be investigated since making timely payments to the creditors is essential to obtain trade discounts. Quick ratio includes solitary(prenominal) the most liquid of the current assets to assess if a company can cover its current liabilities. Metcash Ltds quick ratio also fell moderately from 0.86 times in 2009 to 0.83 times in 2010. A quick ratio of less than 1 indicates that Metcash does not have ample liquid assets to cover its short term obligations. Metcash Ltds most of the cash is tied up in inventory and Metcash Ltd should take measures to improve its liquidity position. f) geezerhoo d inventory= (inventory/cost of sales)*365 Days inventory for 2009= (680.5/9950.9)*365 =24.96 days Days inventory for 2010= (747.2/10435.3)*365 =26.14 days g) Days Debtors= (Account receivables/Revenue)*365 Days Debtors for 2009= (967.7/11067.5)*365 =31.91 days Days Debtors for 2010= (1008/11608.1)*365 =31.70 days h) The days inventory ratio indicate the occur of days it takes to sell the inventory. In the case of Metcash Ltd, the inventory days increased from 24.96 days to