Question 1 [30] Novo (Pty) Ltd specialises in electronics and is a supplier to various industries....

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Question 1 [30] Novo (Pty) Ltd specialises in electronics and is a supplier to various industries. Company management is considering an expansion programme to increase its capacity and market share. As a first step, company management wants to consider the company's performance and profitability. For this purpose, the following information is made available: Statements of Comprehensive Income for Novo (Pty) Ltd for the years 2021 and 2022 Revenue Cost of goods sold Gross profit margin Other expenses Administrative expenses Selling and distribution expenses Operating profit margin Finance charges Net profit before taxes Taxation (28%) Net profit for the year 2021 Rand 10 200 000 6 630 000 3 570 000 2 050 000 1 100 000 950 000 1 520 000 150 000 1 370 000 383 600 986 400 2022 Rand 8 450 000 5 915 000 2 535 000 1 480 000 880 000 600 000 1 055 000 180 000 875 000 245 000 630 000 Additional information: • The company did not increase the prices of its products from 2021 to 2022. • The company replaced some of its suppliers of product components at the end of 2021. Required Note: Round all calculations off to the nearest whole number 1.1 Use the information provided and prepare a set of common-size statements of comprehensive income. Indicate next to each item in the common-size statements, whether the company's performance "Improved", remained "Unchanged" or "Worsened" when comparing the 2022 to the 2021 results. (17) 1.2 Explain to the company's management the causes for any changes in its gross profit, operating profit and net profit margins based on the information in the common size statements. (13) Question 1 [30] Novo (Pty) Ltd specialises in electronics and is a supplier to various industries. Company management is considering an expansion programme to increase its capacity and market share. As a first step, company management wants to consider the company's performance and profitability. For this purpose, the following information is made available: Statements of Comprehensive Income for Novo (Pty) Ltd for the years 2021 and 2022 Revenue Cost of goods sold Gross profit margin Other expenses Administrative expenses Selling and distribution expenses Operating profit margin Finance charges Net profit before taxes Taxation (28%) Net profit for the year 2021 Rand 10 200 000 6 630 000 3 570 000 2 050 000 1 100 000 950 000 1 520 000 150 000 1 370 000 383 600 986 400 2022 Rand 8 450 000 5 915 000 2 535 000 1 480 000 880 000 600 000 1 055 000 180 000 875 000 245 000 630 000 Additional information: • The company did not increase the prices of its products from 2021 to 2022. • The company replaced some of its suppliers of product components at the end of 2021. Required Note: Round all calculations off to the nearest whole number 1.1 Use the information provided and prepare a set of common-size statements of comprehensive income. Indicate next to each item in the common-size statements, whether the company's performance "Improved", remained "Unchanged" or "Worsened" when comparing the 2022 to the 2021 results. (17) 1.2 Explain to the company's management the causes for any changes in its gross profit, operating profit and net profit margins based on the information in the common size statements. (13)

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CommonSize Statements of Comprehensive Income Revenue CommonSize Revenue 2022 Revenue 2022 ... View the full answer