Home For AAT student members AQ 2016 Professional Diploma in Accounting General discussion - Professional level

Credit Management Practise Exam Task 4

Hi,

I'm hoping someone can help me as I'm really stuck on how to complete this question, I'm unsure how to work out the difference in the % between the years I've looked through my books and online but i cannot seem to come back to these answers.

Really hoping someone can help.

Thanks
Sophie

Comments

  • hal978hal978 LondonMAAT, AAT Licensed Accountant Posts: 196
    The gross profit has fallen in absolute terms by:
    (14,177 / 17,215) - 1 = -0.17647 = 17.65% fall

    and the increase of:

    [(8,598 + 5,595) / (7,535 + 5,357)] - 1 =
    (14,193 / 12,892) - 1 = 0.1009 = 10.09%

    in combined distribution and administration costs
  • sophie_612sophie_612 LondonRegistered Posts: 125
    hal978 said:

    The gross profit has fallen in absolute terms by:
    (14,177 / 17,215) - 1 = -0.17647 = 17.65% fall

    and the increase of:

    [(8,598 + 5,595) / (7,535 + 5,357)] - 1 =
    (14,193 / 12,892) - 1 = 0.1009 = 10.09%

    in combined distribution and administration costs

    thanks so much for replying without sounding silly where do you get the -1 from?
  • hal978hal978 LondonMAAT, AAT Licensed Accountant Posts: 196
    The result would be a ratio or an index if I don't take out the 1 (e.g. 0.8235 or 1.1009). So to convert it to a percentage change, 1 has to be deducted.

    Alternatively it could be calculated like this:

    [(14,177 - 17,215) / 17,215] = -3,308 / 17,215 = -0.17647 = 17.65% fall
  • sophie_612sophie_612 LondonRegistered Posts: 125
    edited September 27
    hal978 said:

    The result would be a ratio or an index if I don't take out the 1 (e.g. 0.8235 or 1.1009). So to convert it to a percentage change, 1 has to be deducted.

    Alternatively it could be calculated like this:

    [(14,177 - 17,215) / 17,215] = -3,308 / 17,215 = -0.17647 = 17.65% fall

    thank you for helping me with this, the whole task is a bit if a struggle for me :( do you have any tips for this task?
  • sophie_612sophie_612 LondonRegistered Posts: 125
    would anyone be able to tell me how they got to this gearing ratio answer please?
  • sophie_612sophie_612 LondonRegistered Posts: 125
    edited September 28
    would anyone be able to tell me how they got to this gearing ratio answer of 233.80 please
  • sophie_612sophie_612 LondonRegistered Posts: 125
    would anyone be able to tell me how they got to this gearing ratio answer please?

    would anyone be able to tell me how they got to this gearing ratio answer of 233.80 please

    does anybody have any idea please?
  • Pian32Pian32 Registered Posts: 255
    Hi Sophie

    I didn't do the credit management module. But from the financial statements and D&C.

    The Gearing ratio is - Debt/Equity *100

    (21500+2750)/10372 *100 = 233.80

    I hope this helps might be worth checking the Credit management follows the same rules.
    AAT Level 4, MAAT
    ACCA in progress
    F4- Passed Aug 2020
    F5- Planned for Dec 2020
    F6- Passed Sep 2020
    F7
    F8
    F9
    sophie_612
  • Bran278Bran278 ManchesterRegistered Posts: 36
    Pian32 said:

    Hi Sophie

    I didn't do the credit management module. But from the financial statements and D&C.

    The Gearing ratio is - Debt/Equity *100

    (21500+2750)/10372 *100 = 233.80

    I hope this helps might be worth checking the Credit management follows the same rules.

    I assume that they will also accept D/D+E *100 also? As this calculation gives a completely different figure obviously.
    sophie_612
  • Waiwai86Waiwai86 Registered, AAT Student Posts: 11
    Hi, sorry to jump in but I got stuck on the same part too. Does anyone know if D/D+E would be accepted as the question does not state different? Also I am struggling to find the credit terms (attached), any help would be appreciated.

    Thanks
  • Waiwai86Waiwai86 Registered, AAT Student Posts: 11
    Hi, sorry to jump in but I got stuck on the same part too. Does anyone know if D/D+E would be accepted as the question does not state different? Also I am struggling to find the credit terms (attached), any help would be appreciated.

    Thanks
  • Waiwai86Waiwai86 Registered, AAT Student Posts: 11
    Hi, sorry to jump in but I got stuck on the same part too. Does anyone know if D/D+E would be accepted as the question does not state different? Also I am struggling to find the standard payment terms at the end of the liquidity part, any help would be appreciated.

    Thanks
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