Calculation and Explanation of the Financial Ratios of CT PLC

Coursework Instructions:

Required: Prepare a 400 word report to the Board of CT PLC covering the following:
1. For CT PLC, explain and calculate the following Ratios for 2021 and 2020: Gross Profit Margin, Operating Profit Margin, Current ratio, Acid Test, Settlement Period for Trade Receivables, Settlement Period for Trade Payables, Inventories Turnover Period, and Sales revenue per employee.
2. You have been approached by the staff representatives who are requesting a 5% wage increase for 2022. Annual Inflation is currently 2.7%. From the calculations above and comparing CT PLC with the Beverage industry and drawing on appropriate HR/Business theory provide a business case for or against a 5% rise in wages and salaries. Make your recommendation to the board.

Coursework Sample Content Preview:

Student’s Name
Professor
Course
Date
HR CT Finance Assignment
This discussion is an evaluation of the financial ratios for CT PLC and a recommendation to the board on the staff representatives’ request for a 5% wage increase for 2022.
CALCULATION AND EXPLANATION OF THE FINANCIAL RATIOS
The table below shows the ratios calculated as per the attached spreadsheet.
Year

Profitability ratios

Liquidity ratios

Efficiency ratios

Gross Profit Margin

Operating Profit Margin

Current Ratio

Acid Test

Settlement Period for Trade Receivables

Settlement Period for Trade Payables

Inventories Turnover Period

Sales Revenue per Employee

2021

30%

12%

2.0

1.1

44

37

63

500,000

2020

29%

11%

2.3

1.4

37

22

57

500,000

Industry

28%

9.5%

1.8

N/A

N/A

N/A

N/A

480,500

The profitability and current rati...

Updated on January 26, 2024

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Calculation and Explanation of the Financial Ratios of CT PLC

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