Answer ALL questions.

Question One and Two are based on the information provided below for Mia Limited

INFORMATION:

In December $2023,$ Mia Limied was plarnigg is financial needs for the coming year. As a first inficazion, the

firm's management required a pro forma Statement of Fhancial Position as at $31$ December $2024$ lo gauge the

financial needs at that time. The financial condition as at $31$ December $2023$ was refected in this statement of

Financial Position:

ADDITIONAL INFORMATION

Operations for the folowing year were prefected using the following working assumptions to

plan the financial resultis:

Sales were forecast at R$20900000.$

Capital expenditures were scheduled at R$42000$ for a delivery van and R$72000$ for

warehouse improvements.

Depreciation is expected to be R$6?800$ tor the year

Imventocies, Accounts receivable and Accounts payable are essimated to be $10\%,4\%$

and $6\%$ of sales respectively.

Cash balances are desired to be ro less than R$300000.$

Net proft ater tax is expected at $z$ level of $0\mathrm{.}19\%$ of sales.

Dividends for the year were estimuted at R$25000.$

A mortgage loan repayment of R$2$J $000$ is expected to be made.

Other curent labilities will be allowed to fluctuate with seasonal needs.

QUESTION ONE

$(25$ Marks$)$

REQUIRED

$1\mathrm{.}1$ Use the information provided to Prepare the pro forma Statement of Financial Position as at $31$ Deosmber

$2024$

$(20)$

$1\mathrm{.}2$ Discuss the purpose of projected financial statements in bushess planning and decision$-$making highlikyring

their significance for managerial decision$-$making, itvestor relations, and strategic planning.

Using the information provided above, answer the following questions:

$2\mathrm{.}1$ Calculate the following ratios for the yest ending $2023$

$2\mathrm{.}1\mathrm{.}1$ Current Ratio

$2\mathrm{.}1\mathrm{.}2$ Debt to equity ratio

$2\mathrm{.}1\mathrm{.}3$ Inventory turnover ratio

$2\mathrm{.}1\mathrm{.}4$ Return on equity

$2\mathrm{.}1\mathrm{.}5$ Acid test ratio

$2\mathrm{.}1\mathrm{.}6$ Capital gearing ratio

$22$ Explain how the company's decision to maintain a cash balance of at least R$300,000$ afflecss its liquidity

position.

QUESTION THREE

$(25$ Marks$)$

$3\mathrm{.}1$ You are considering an investment opprounity that promises to pay you R$10,000$ in exactly $3$ years. It the

arrual interest rate is $5\%,$ what is the present value of this investment?

in the account ater $5$ years?