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GRAT Authority operates passenger railway services and is responsible for the maintenance of track signaling equipment, and other facilities such as stations. In recent years it has been criticized for providing poor services to the traveling public in terms of punctuality, safety, and the standard of facilities offered to passengers. Last year, GRAT Authority invested over GH¢20 million in new carriages, station facilities, and track maintenance programs in an attempt to address these criticisms.
Summarized financial results for GRAT Authority for the last two years are given below:
Extracts of Statement of Profit or Loss account for the year ended 31 December
Statement of Financial Position as at 31 December
Required:
a) Calculate the following ratios for GRAT Authority for 2017 and 2018, clearly showing your workings.
i) Return on capital employed (ROCE)
ii) Net profit margin
iii) Asset turnover
iv) Current ratio
b) Evaluate the financial performance of the entity in 2017 and 2018 as revealed by the above ratios.
c) Suggest THREE (3) non-financial indicators that could be useful in measuring the performance of a passenger railway service and explain why your chosen indicators are important.
d) Explain the term short-termism and suggest ways in which a long-term view can be encouraged.
(Total: 20 marks)
Find Related Questions by Tags, levels, etc.
Find Related Questions by Tags, levels, etc.
GRAT Authority operates passenger railway services and is responsible for the maintenance of track signaling equipment, and other facilities such as stations. In recent years it has been criticized for providing poor services to the traveling public in terms of punctuality, safety, and the standard of facilities offered to passengers. Last year, GRAT Authority invested over GH¢20 million in new carriages, station facilities, and track maintenance programs in an attempt to address these criticisms.
Summarized financial results for GRAT Authority for the last two years are given below:
Extracts of Statement of Profit or Loss account for the year ended 31 December
Statement of Financial Position as at 31 December
Required:
a) Calculate the following ratios for GRAT Authority for 2017 and 2018, clearly showing your workings.
i) Return on capital employed (ROCE)
ii) Net profit margin
iii) Asset turnover
iv) Current ratio
b) Evaluate the financial performance of the entity in 2017 and 2018 as revealed by the above ratios.
c) Suggest THREE (3) non-financial indicators that could be useful in measuring the performance of a passenger railway service and explain why your chosen indicators are important.
d) Explain the term short-termism and suggest ways in which a long-term view can be encouraged.
(Total: 20 marks)
Find Related Questions by Tags, levels, etc.
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