A sample lecture on LCCI Level 2 Bookkeeping and Accounting on the topic of (Profitability Ratios Practice Video 1 of 5) conducted by Subject Specialist, Mr Ng Kian Tuck. Wish to find out more about LCCI Qualification? Contact us.
The session starts with an explanation of the formula and evaluation of changes in ratios. It delves into the current ratio and C test ratio formulas, and the shift in these ratios from last year to this year. It highlights the risks of having fewer current assets and potential repayment issues. The rise in the ACE tax ratio in 2019 and its connection to current assets is scrutinized. Interestingly, the asset test ratio improves due to a decrease in inventory and an increase in receivable and cash balances, indicating a business improvement.
