Btec Business Essay Example for Free

Btec Business EssayIm not sure about this figure, with th0d Returned on hood employed Net profit (after appropriations) X 100 = 44160 = 29. 61% Capital employed 149160 This figure shows you how much money will be returned back into the furrow depending on how much they have invested. Not investing money into the business means you will not be making profit. I am not sure if 29. 61% is a sound figure but it must be a good figure if the capital employed is ? 149,160. Maybe if the division is higher they employ more capital and they can re-invest more. Liquidity ratios-Current ratioCurrent assets 1 = 70160 = 4. 531 Current liabilities 15500 Every ? 1 that they owe they own ? 4. 53 worth of assets. For SIGNature ltd the ratio is good, meaning not too much stock or owing too much to debtors. window pane test ratio Current assets assets 1 = 70160 1200 = 4. 41 Current liabilities 15500 Every ? 1 they owe to suppliers or banks they will have ? 4. 41 of actual assets. This means they have enough money to throw for costs like heating, lighting, telephone, courier charges and insurance. Average stock Kept over the year X 365 = 6000 = 9. 3 days Cost of goods sold 521700 Efficiency Ratios-Rate of stock turnover Every 9 to8 days they make a sale this figure is not good because when running a business like SIGNature ltd you would like to be making sales more often. Debtors X 365 = 41000 = 28. 69 days Credit sales 521700 Debtors payment period A debtors payment is just about monthly meaning credit customers pay them every(prenominal) 28. 69 days, SIGNature should monitor their debtors and check how much they buy, when they pay back the full amount and which debtors are not paying in the 30 day period.Creditors X 365 = 15500 = 24. 11 days Credit purchases 234675 Creditors payment period 24 days is how long SIGNature takes to pay for credit purchases and they do pay their credit in good time. If you dont to your credit suppliers respond you may be charged additio nal interest, penalties and surcharges. Your debt may be referred to a private debt collection agency. goal In this task I have performed ratio analysis and measured the profitability and efficiency of SIGNature and analysed the performance of a business using worthy ratios.