Complete the table below: Return on capital employed (ROCE); Rate of inventory turnover; Trade receivables turnover (days); Trade payables turnover (days); Current ratio. Show your workings and present the answers as instructed.
Suggest two methods that Rushil could use to improve his return on capital employed (ROCE).
Suggest two methods that Rushil could use to improve his inventory turnover rate.
State why the inventory was shown at a lower value.
Name the accounting principle being applied.
Complete the table by placing a tick (✓) to show the effect on Rushil’s gross profit of recording his damaged inventory at a lower value. Options: increase, decrease.
Advise Rushil whether or not he should allow his credit customers a cash discount if they make payment to him within 21 days. Support your answer with arguments both for and against Rushil allowing his credit customers a cash discount if they make payment to him within 21 days.