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Treats Co Financial Analysis 2025

The document provides financial data for Treats Co, a confectionery manufacturer, for the year ending September 30, 20X6, including key financial ratios and extracts from its profit and loss statement and financial position. It compares Treats Co's performance against sector average ratios and outlines relevant information regarding its assets, liabilities, and dividend payments. The assignment requires calculating Treats Co's equivalent ratios and analyzing its performance relative to sector averages.

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3 views2 pages

Treats Co Financial Analysis 2025

The document provides financial data for Treats Co, a confectionery manufacturer, for the year ending September 30, 20X6, including key financial ratios and extracts from its profit and loss statement and financial position. It compares Treats Co's performance against sector average ratios and outlines relevant information regarding its assets, liabilities, and dividend payments. The assignment requires calculating Treats Co's equivalent ratios and analyzing its performance relative to sector averages.

Uploaded by

abuabebe043
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Individual assignment 2025

Financial management for logistics and supply chain management student

Treats Co manufactures confectionery. The following sector average ratios have been
obtained for the year ended 30 September 20X6:

Ratio Sector Average


Return on capital employee 28.80%
Net asset turn over 2.4 times
Gross profit margin 55%
Operating profit margin 12%
Current Ratio 1.8:1
Inventory turn over ratio 25 days
Gearing(Debet/Equity) 43%
Receivable collection period 15 days

Extracts from the financial statements of Treats Co for the year ended 30 September 20
X6 are as follows:

Statement of profit or loss:

Revenue 214,553,000.00
cost of sale (108,009,000.00)
Gross profit 106,544,000.00
Operating Expense (99,078,000.00)
Profit from Operation 7,466,000.00
Finance cost (1,329,000.00)
Profit Befor tax 6,137,000.00
taxation (1,783,000.00)
profit for the year 4,354,000.00
Statement of financial position

PPE 61,984,000.00
Curretn asset
Inventory 30,393,000.00
Trade and other receivable 17,603,000.00
109,980,000.00
EQUITY
Ordinary share 7,000,000.00
Lthe rcomponent of equity 13,605,000.00
Retained earning 5,363,000.00
25,968,000.00
Non current liability
Borrowing 33,621,000.00
Current liability
Trade and other payable 25,390,000.00
Individual assignment 2025
Financial management for logistics and supply chain management student

overdraft 24,090,000.00
current tax liability 911,000.00
84,012,000.00
equity and liability 109,980,000.00

The following information is also relevant:


1. The property, plant and equipment relates to retail stores operated by Treats Co and
the manufacturing plant, all of which are depreciated on a straight‐line basis over
20 years. The original cost of these assets was $637.84m and the directors are now
considering replacing and updating much of the plant and equipment.
[Link] Co paid a dividend of $7.14m during the year despite the concern raised by
some directors over the existing overdraft.
3. The overdraft is used for working capital management purposes and does not form
part of the long‐term financing of Treats Co.
4. Treats Co sells its products through supermarket chains in addition to its owned retail
stores. Most companies in the sector exclusively sell through their own retail stores.
Required:
(a) Calculate for Treats Co the equivalent ratios to those provided for the confectionery
Manufacturing sector. (5 marks)
(b) Analyses the performance and financial position of Treats Co in comparison to its
Sector averages(15).

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