1. Interpretation of Accounts Harbin
Acca December 2007
Mark Fielding-Pritchard
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2. Harbin a)
ROCE 24000/( )= 11.2%
Inventory days (25000/200000)365= 46 days
Gearing(100000/214000)= 46.7%
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3. Harbin Increase in sales revenue All purchased
Increased costs in CofS are greater than Fatima’s share
However half of Fatima’s operating expenses have been eliminated
Interest cover is 3
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4. Harbin Efficiency Inventory Days 46, 37 Receivables Days 19,16
Payables Days 42,32
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5. Harbin Liquidity CA/CL 0.9,2.5 Acid ratio (13/44)= 30%, (22/15) = 147%
Cash (17000), 14000
Cash has declined 250% of profit
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6. Harbin risk
Interest Cover 3, n/a
Gearing 46%, n/a
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7. Harbin Summary Assets have doubled, but revenue has risen by 39%
Assets are all funded by debt
Worsenng of cash position
Net Profit is 4.8% (12/250) but interest cost is 8%
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