The following draft financial statements relate to Robert, a private company.

Statement of financial position as at:

The following additional information is relevant: M

(i) Income statement extract for the year ended 30 September 2016

Operating profit before interest and tax 270

Interest expenses (260)

Interest receivable 40

Profit before tax 50

Net income tax credit 50

Profit for the year 100

Note: The interest expenses include finance lease interest

(ii) The details of the property, plant and equipment are:

Cost Acc’d Depreciation Carrying value

At 30 September 2015 20,200 4,400 15,800

At 30 September 2016 16,000 5,400 10,600

During the year Robert sold its factory for its fair value MUR 12 million and agreed to rent it back, under an operating lease, for a period of five years at MUR 1 million per annum. At the date of sales, it had a carrying value of MUR 7.4 million based on a previous revaluation of MUR 8.6 million less depreciation of MUR 1.2 million since the revaluation. The profit on the sales of the factory has been included in operating profit. The surplus on the revaluation reserve related entirely to the factory. No other disposal of non-current assets was made during the year.

Plant acquired under finance leases during the year was MUR 1.5 million.

REQUIRED (a) Prepare a statement of cash flows in accordance with IAS 7 Statement of cash flows for the year ended 30 September 2016. [24 marks]

(b) Calculate the following ratios for Robert for the year ended 30 September 2016.

(i) Net profit margin (revenue: MUR 400,000)

(ii) Return on equity

(iii) Return on capital employed

(iv) Current ratio

(v) Quick Ratio

(vi) Gearing
 

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Non-Current Assets Property, plant and equipment (note ii) Current Assets Inventory Trade receivables Cash and banks Total assets Equity and liabilities Shares capital of MUR 1 each Revaluation (note ii) Retained earnings Non-Current Liabilities Finance lease obligations (note ii) 6% loan notes 10% loan notes Current Liabilities Bank Overdraft Trade payables Finance lease obligations (note ii) Current tax payable Total equity and liabilities 30 September 2016 MUR 000 MUR 000 2,550 4,600 850 Nil 2,550 2,000 1,000 1,400 Nil 4,650 900 100 10,600 8,000 18,600 6,000 2,550 8,550 4,400 5,650 18600 30 September 2015 MUR 000 MUR 000 1,850 3,800 Nil 1,600 850 1,700 500 4,900 550 3,350 800 1,200 15,800 5,650 21,450 6,000 2,450 8,450 7,100 5,900 21,450 Non-Current Assets Property, plant and equipment (note ii) Current Assets Inventory Trade receivables Cash and banks Total assets Equity and liabilities Shares capital of MUR 1 each Revaluation (note ii) Retained earnings Non-Current Liabilities Finance lease obligations (note ii) 6% loan notes 10% loan notes Current Liabilities Bank Overdraft Trade payables Finance lease obligations (note ii) Current tax payable Total equity and liabilities 30 September 2016 MUR 000 MUR 000 2,550 4,600 850 Nil 2,550 2,000 1,000 1,400 Nil 4,650 900 100 10,600 8,000 18,600 6,000 2,550 8,550 4,400 5,650 18600 30 September 2015 MUR 000 MUR 000 1,850 3,800 Nil 1,600 850 1,700 500 4,900 550 3,350 800 1,200 15,800 5,650 21,450 6,000 2,450 8,450 7,100 5,900 21,450

Answer rating: 100% (QA)

b i Net Profit Margin Net Proft Revenue 100 100000 ... View the full answer