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it is not current- ratio analysis information is historic.
Ratio analysis does not measure the element of a firm.

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1. changes- for example there could be changes in policies and procedures.
2. Inflationary changes- overtime, inflation may have occurred

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8,000x0.1=800
second year=(8,000-800)x0.1=720

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It isn't current; the ratio analysis data is from the past.
The element of a company is not measured by ratio analysis.
inflation

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Non current asset =22
Total liability=40-10=30
Long debt=2.1*10=21
Current liability=TL-Non-Current liability=30-21=9
Current asset=2*9=18
Non-current asset=40-18=22

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inflation, if the rate have changed, mean the number aren't comparable
historical, all the information are derived from historical result.

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nca= 22
total liability = 30
long debt= 21
current liability= 9
current asset= 18
non-current asset= 22

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TL=40-10=30
NCA=2.1*10=21
CL=30-21=9
CA=2*9=18
NCA=40-18=22

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8000*10%=800 8000-800=7200
7200*10%=720 7200-720=6480

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current asset=10,500 current liability=7000
Working capital=10500-7000=3500

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assets- items that company owns for their benefit in the future
for example: cash, investments, inventory
liabilities- are what are owed
for example: bank debt, mortgage debt, taxes owed

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total liability = £40-£10=£30
long debt = 2.1*10 = 21
cl = 30-21 = £9
ca = 2*9 = 18
nca = 40-18 = £22

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Assets refers to a resource controlled by an entity as a result of past events from which future economic benefits are expected to flow to the entity.
For example: Buildings, Inventory and cash
Liability refers to present obligation pf the entity arising from the events, the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits.
For example: Overdraft and loan

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Manipulate

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first year:8000*0.1=800
second year:7200*0.1=720
NBV=8000-720-800=6480

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Income statement, Balance sheet

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40,000*7%*9/12=2100

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8000*0.1 = 800
8000-800 = 7200
7200*0.1 = 720
NBV 7200 - 720 = 6480

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1. manipulate

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i) income statements
ii) balance sheet

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CL=2100/0.3=7000
CA=1.5*7000=10500
WC=10500-7000=3500

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cl = 7000
ca = 1.5*7,000 = 10,500
wc = 10,500-7,000 = 3,500

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Assets:
A resource controlled by an entity as a result of past events and
from which future economic benefits are expected to flow to the
entity.
example: buildings, inventory, cash
Liabilities:
A liability is a present obligation of the entity arising from past
events, the settlement of which is expected to result in an
outflow from the entity of resources embodying economic
benefits.
example: overdraft, supplier credit

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assets-what is owned by a business ex. buildings, inventory and cash
liabilities- what us owed by a business ex. loan, taxes

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Manipulate

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40,000(7%)(9/12)= 2100

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1.income statement
2.Balance sheet

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manipulate

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(i) income statement
(ii)balance sheet

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40000*7%*(9/12)=2100

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£40,000*0.07*(9/12) =2100