Financial Analysis of JKY Limited

Financial Overview of JKY Limited

• Reporting period for ratios is the year ending 30 April 2020.
• Key financial data includes:
  • Revenue: $209,510
  • Purchases: $121,618

Inventory and Trade Receivables

• Ending inventory as of 30 April 2020 is valued at $11,050.
• Trade receivables (amount owed by customers) total $28,700.
• Beginning inventory on 1 May 2019 was $8,000.

Bank Overdraft

• JKY Limited has a bank overdraft of $6,280, indicating short-term financial challenges.

Ratios Calculation

• Two ratios to be calculated:
  • Rate of Inventory Turnover
  • Trade Receivables Turnover (in days)

Rate of Inventory Turnover

• Formula: Rate of Inventory Turnover = Cost of Goods Sold (COGS) / Average Inventory
• COGS can be calculated as Purchases + Opening Inventory - Closing Inventory.
• Calculation involves utilizing the provided purchase and inventory values to derive the turnover rate.

Trade Receivables Turnover (Days)

• Formula: Trade Receivables Turnover = (Trade Receivables / Revenue) x 365
• This provides insights into how quickly the company collects payments from customers.
• Calculation involves substituting the amounts for trade receivables and revenue to derive the number of days.

This quiz focuses on the financial overview of JKY Limited for the year ending April 30, 2020. You will calculate important financial ratios such as the Rate of Inventory Turnover and Trade Receivables Turnover. Use the provided financial data to test your understanding of financial analysis concepts.