ACTIVITY $1-$FINANCIAL ASSESSMENT

$[50$ MARKS$]$

This section of the project is based on the listed Jamaican company that each group was assigned during classes.

REQUIRED:

Conduct a financial assessment of the company over the three $(3)$ year period as follows:

Profitability: with the AID of following ratios

$($a$)$ Net Profit Margin

$($b$)$ Gross Profit Margin $($not required for those assessing banks$)$

$($c$)$ Return on Assets

$($d$)$ Return on Equity

Liquidity: with the AID of following ratios

$($a$)$ Current Ratio

$($b$)$ Acid Test Ratio

Operational Efficiency: with the AID of the following ratios

$($a$)$ Overhead efficiency

$($b$)$ Assets turnover $($total sales$/$total asset$)$

Solvency and Leverage: with the AID of the following ratios

$($a$)$ Debt to Equity Ratio

$($b$)$ Debt to Assets Ratio

Market Prospect: with the AID of the following ratios

$($a$)$ Earnings Per Share

$($b$)$ Price Earnings Ratio

$($c$)$

The assessment of the performance of the company must include the presentation of background information on the company and must end with a conclusion of the performance of the company over the three $(3)$ years period.

PLEASE USE THE QUESTION DONE IN CLASS FOR YOUR OUTLINE.

$(50$ MARKS$)$

ACTIVITY $2-$MINI CASE EXERCISE

$[50$ marks$]$

THE CASE

Valor Limited is a medium sized company located in Kingston, Jamaica. It was incorporated on I January $2015,$ with an authorized capital of $50,000,000,$$$1$ ordinary shares. The issued capital of the company is currently $30,000,000,$$$1$ ordinary shares.

The company is a retailer of small electronic appliances and has a branch located in Lucea, Hanover. Below are the financial statements of the company for the year ended $31$ December $2023,$ before adjustments for the notes that follow.

$\backslash$table$[[$Valor Limited$],[$Draft Statement of financial Position as $31$ December $2023],[,],[,$$$000],[$Non Current Assets,$],[$Property$,$Plant and Equipment at NBV$,90,000],[,90,000],[$Current Assets,$],[$Inventory$,2,400],[$Receivables$,7,200],[$Bank$,4,000],[,13,600],[,103,600],[,],[$Share capital $($$$1$ Ordinary Shares$),30,000],[$Retained Earnings,$6,400],[$Non Current Liabilities: Loans,$60,000],[$Current Liabilities,$7,200],[,103,600]]$

CASE QUESTIONS

Show the journal entries to record the government grant for the first two $(2)$ years.

$(8$ marks$)$

Show the relevant computations and journal entries to record the revaluation of the PPE during the year

$(6$ marks$)$

Prepare the revised statement of Profit and loss for the year ended $31$ December $2022,$ after all five $(5)$ notes above have been taken into account

$(12$ marks$)$

Prepare the revised statement of Financial Position as at $31$ December $2022,$ after all five$(5)$ notes above have been taken into account.

$(18$ marks$)$

Prepare the revised statement of changes in equity for the year ended $31$ December $2022,$ after all five $(5)$ notes above have been taken into account

$(6$ marks$)$

END OF PROJECT