Answer ALL questions.

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

INFORMATION:

In December $2023,$ Mia Limited was planning its financial needs for the coming year. As a first indication, the

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

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

Financial Position:

Statement of Financial Position as at $31$ December $2023$

$R$

ASSETS

Non$-$current assets

Property, plant and equipment

Accumulated depreciation

Other non$-$current assets

Current assets

Inventories

Accounts receivable

Cash and cash equivalents

Total assets

EQUITY AND LIABILITIES

Equity

Ordinary share capital

Retained income

Non$-$current liabilities

Mortgage bond

Current liabilities

Accounts payable

Other current liabilities

Total equity and liabilities

$3434200$

Answer ALL questions.

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

INFORMATION:

In December $2023,$ Mia Limited was planning its financial needs for the coming year. As a first indication, the

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

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

Financial Position:

Statement of Financial Position as at $31$ December $2023$

$R$

ASSETS

Non$-$current assets

Property, plant and equipment

Accumulated depreciation

Other non$-$current assets

Current assets

Inventories

Accounts receivable

Cash and cash equivalents

Total assets

EQUITY AND LIABILITIES

Equity

Ordinary share capital

Retained income

Non$-$current liabilities

Mortgage bond

Current liabilities

Accounts payable

Other current liabilities

Total equity and liabilities

$3434200$

ADDITIONAL INFORMATION:

Operations for the following year were projected using the following working assumptions to

plan the financial results:

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$62800$ for the year.

Inventories, Accounts receivable and Accounts payable are estimated to be $10\%,4\%$

and $6\%$ of sales respectively.

Cash balances are desired to be no less than R$300000.$

Net profit after tax is expected at a level of $0\mathrm{.}19\%$ of sales.

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

A mortgage loan repayment of R$20000$ is expected to be made.

Other current liabilities 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 $31$ December

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

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

QUESTION TWO

Using the information provided above, answer the following questions:

$2\mathrm{.}1$ Calculate the following ratios for the year 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

$2\mathrm{.}2$ Explain how the company's decision to maintain a cash balance of at least R$300,000$ affects its liquidity

position.

Using the information provided above, answer the following questions:

$2\mathrm{.}1$ Calculate the following ratios for the year 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

$2\mathrm{.}2$ Explain how the company's decision to maintain a cash balance of at least R$300,000$ affects its liquidity

position.

QUESTION THREE

$(25$ Marks$)$

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

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

$3\mathrm{.}2$ You deposit R$5,000$ into a savings account that pays an annual interest rate of $8\%.$ How much will you have

in the account after $5$ years?

$3\mathrm{.}3$ You are offered an investment that will double your money in $10$ years. What is the implied interest rate of

this investment?

$3\mathrm{.}4$ You invest R$20,000$ in a bond that promises to triple your money. If the bond pays an annual interest rate of

$10\%,$ how long will it take for your investment to triple?

$3\mathrm{.}5$ Explain in detail why understanding the concept of time value of money is essential for financial decision$-$

making.

Springboks Limited is looking to expand its operations and increase its market share in the cell phone industry.

To achieve this, they are looking to increase its current productive capacity of $10000$