MKBerry Is the Managing Director of CE Ltd

question 172

Essay

M.K.Berry is the managing director of CE Ltd.a small,family-owned company that manufactures cutlery.His company belongs to a trade association that publishes a monthly magazine.The latest issue of the magazine contains a very brief article based on the analysis of the accounting statements published by the 40 companies that manufacture this type of product.The article contains the following table:
CE Ltd's latest financial statements are as follows:
The country in which the company operates has no corporate income tax.No dividends were paid during the year.All sales are on account.

Required:
a)Calculate each of the ratios listed in the magazine article for this year for CE,and comment briefly on CE Ltd.'s performance in comparison to the industry averages.
b)Explain why it could be misleading to compare CE Ltd.'s ratios with those taken from the article.

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Definitions:

Liability

A financial obligation or responsibility, often legal in nature, that an entity or individual has to another.

Agent

An individual authorized to act on behalf of another party, known as the principal, in dealings with third parties.

Doctrine Of Respondeat Superior

This legal principle holds an employer or principal legally responsible for the wrongful acts of an employee or agent, performed within the scope of employment or agency.

Tortious Behavior

Actions that cause harm or loss to another person, leading to civil legal liability.