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Mathematics & Economics
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Research Paper
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English (U.K.)
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Business Finance Assignment: Clarke Industrial Fasteners Ltd

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BUSINESS FINANCE HOMEWORK ASSIGNMENT 1 SUBMISSION DATE: 20th October 2017 Clarke Industrial Fasteners Ltd REQUIRED: (a) Calculate the profitability, asset utilisation, working capital, liquidity and capital structure ratios for Clarke Industrial Fasteners Ltd for both years. (35 marks) (b) Explain why the return on capital employed (ROCE) measure is considered an important indicator of financial performance. (12 marks) (c) Discuss the reasons for the change in Clarke Industrial Fasteners Ltds' ROCE in 2017. (20 marks) (d) Highlight the strengths and weakness of the business as revealed by the financial ratios in part (a), the financial statements and any other relevant information in the case study. (13 marks) (e) Outline five (5) recommendations that would help improve the financial position and performance of the business. Highlight one advantage and one disadvantage for each recommendation. (20 marks) This is not a paper, it is a homework need to be computed, and also need steps, and the process. thank you

Research Paper Sample Content Preview:

Business Finance Homework Assignment 1
Name
Institution
Date
a) Calculate the profitability, asset utilisation, working capital, liquidity and capital structure ratios for Clarke Industrial Fasteners Ltd for both years. (35 marks)
Profitability ratios
Profitability ratios
Gross profit Margin=Gross profit/ Sales*100%
2017= € 1,650,000/ €6,600,000=25%
2016=1,350,000/ 4,050,000=33.33%
Net profit margin= Net Income/ Sales *100%
2017= 40,800/ 6,600,000=0.62%
2016= € (43,000)/4,050,000=-1.06%
Operating profit margin=EBIT/Sales
2017=231,000/6,600,000=3.5%
2016=117,000/ 24,050,000=2.89%
Return on Total Assets=Net income/Total Assets
2017 =40,800/ /2,698,940=1.5%
2016=€ (43,000)/ 2,140,080=-2%
Return on Common Equity= Net Income/Common Equity
2017= 40,800/ 297,800= 13.7%
2016-€ (43,000)/ 257,000= -16.73%
Asset utilisation ratios
Receivable turnover= Credit Sales/Average accounts receivable
2017= €6,600,000/ €556,800=11.85
2016= &euro...
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