Question 1 (34 marks) The new managing director (MD) of Laser & Tiger Ltd has asked...

 

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Question 1 (34 marks) The new managing director (MD) of Laser & Tiger Ltd has asked you to analyse and give your views on the relative profitability and liquidity. The following summarised financial statements have been prepared for two years. ASSETS Non-current assets PPE Investments in properties Investments in subsidiaries. Loan receivable Goodwill Total non-current assets Current assets Inventory Trade receivables Cash and cash equivalents Total current assets TOTAL ASSETS EQUTY AND LIABILITIES Equity Stated capital Retained earnings Total equity Non-current liabilities. Loans from shareholders Laser & Tiger Ltd Statement of financial position as at 30 June 2010 N$ 2010 Long-term debt Total non-current liabilities. Current liabilities Trade payables Provisions Taxation payables 1.1 Report format 1.2 Gross profit percentage 1.3 Net profit percentage 1.4 ROABT 1.5 ROCE Page 21 of 27 150,000.00 5,000,000.00 1.6 Days inventory on hand 48,000.00 250,000.00 120,000.00 5,568,000.00 76,000.00 42,000.00 1,200,000.00 1,318,000.00 6,886,000.00 3,000,000.00 2,685,000.00 5,685,000.00 120,000.00 950,000.00 1,070,000.00 79,000.00 41,000.00 11,000,00 131,000.00 6,886,000.00 NS 2009 120,000.00 4,500,000.00 54,000.00 300,000.00 100,000.00 5,074,000.00 35,000.00 11,000.00 1,300,000.00 1,346,000.00 6,420,000.00 Total current liabilities TOTAL EQUITY AND LIABILITIES Additional information: 1. Included in other income is interest income of NS 34 000 (2009: NS 40 000). 2. 20% of all sales (revenue) were made on credit. 3. Purchases on N$ 150 000 and N$ 120 000 were made on credit in 2010 and 2009 respectively. All other purchases were for cash. 3,000,000.00 2,430,000.00 5,430,000.00 100,000.00 750,000.00 850,000.00 54,000.00 63,000.00 23,000.00 You are required to: 1. Use the information in respect of Laser & Tiger Ltd 2010 and 2009 financial year, to write a report to the MD analysing the results. (NB: calculate the ratios I.R.O working capital and formulas are crucial) 140,000.00 6,420,000.00 (3 marks) (2 marks) (2 marks) (2 marks) (2 marks) (2 marks) 1.7 Debtors collection period 1.8 Creditors collection period 2. Discuss what each of the above seven ratios tells you about the efficiency and the profitability of Laser & Tiger Ltd in 2010. (17 marks) (2 marks) (2 marks) Question 1 (34 marks) The new managing director (MD) of Laser & Tiger Ltd has asked you to analyse and give your views on the relative profitability and liquidity. The following summarised financial statements have been prepared for two years. ASSETS Non-current assets PPE Investments in properties Investments in subsidiaries. Loan receivable Goodwill Total non-current assets Current assets Inventory Trade receivables Cash and cash equivalents Total current assets TOTAL ASSETS EQUTY AND LIABILITIES Equity Stated capital Retained earnings Total equity Non-current liabilities. Loans from shareholders Laser & Tiger Ltd Statement of financial position as at 30 June 2010 N$ 2010 Long-term debt Total non-current liabilities. Current liabilities Trade payables Provisions Taxation payables 1.1 Report format 1.2 Gross profit percentage 1.3 Net profit percentage 1.4 ROABT 1.5 ROCE Page 21 of 27 150,000.00 5,000,000.00 1.6 Days inventory on hand 48,000.00 250,000.00 120,000.00 5,568,000.00 76,000.00 42,000.00 1,200,000.00 1,318,000.00 6,886,000.00 3,000,000.00 2,685,000.00 5,685,000.00 120,000.00 950,000.00 1,070,000.00 79,000.00 41,000.00 11,000,00 131,000.00 6,886,000.00 NS 2009 120,000.00 4,500,000.00 54,000.00 300,000.00 100,000.00 5,074,000.00 35,000.00 11,000.00 1,300,000.00 1,346,000.00 6,420,000.00 Total current liabilities TOTAL EQUITY AND LIABILITIES Additional information: 1. Included in other income is interest income of NS 34 000 (2009: NS 40 000). 2. 20% of all sales (revenue) were made on credit. 3. Purchases on N$ 150 000 and N$ 120 000 were made on credit in 2010 and 2009 respectively. All other purchases were for cash. 3,000,000.00 2,430,000.00 5,430,000.00 100,000.00 750,000.00 850,000.00 54,000.00 63,000.00 23,000.00 You are required to: 1. Use the information in respect of Laser & Tiger Ltd 2010 and 2009 financial year, to write a report to the MD analysing the results. (NB: calculate the ratios I.R.O working capital and formulas are crucial) 140,000.00 6,420,000.00 (3 marks) (2 marks) (2 marks) (2 marks) (2 marks) (2 marks) 1.7 Debtors collection period 1.8 Creditors collection period 2. Discuss what each of the above seven ratios tells you about the efficiency and the profitability of Laser & Tiger Ltd in 2010. (17 marks) (2 marks) (2 marks)

Answer rating: 100% (QA)

1 Report on Laser Tiger Ltds Financial Performance for 2010 and 2009 11 Gross Profit Percentage The gross profit percentage is calculated as gross profit divided by sales revenue expressed as a percen... View the full answer