Jomens (Pty) Ltd is an innovative technology company. They have experienced reasonable growth over the last...

 

 

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Jomens (Pty) Ltd is an innovative technology company. They have experienced reasonable growth over the last few years and have consulted you as they face several key decisions. The Owners' Equity and Liabilities section of the balance sheet of the company on 31st December 2021 is as follows: Share Capital Retained Income Total Owners' Equity Preference Shares Loan from Bank Total Owners' Equity + Debt 1,000,000 19,000,000 20,000,000 Profit after Tax Depreciation Change in Net Working Capital Net Capital Expenditures Free Cash Flows 5,000,000 10,000,000 35,000,000 The Ordinary Shares consist of 1,000,000 ordinary shares with a par value of R10 each. The owners, who also own the company, are contemplating listing the business on the JSE Alternative Exchange in order to raise funds to fund further expansion. They are unsure as to what list price they should be asking for. You know one of the owners personally and he knows you recently completed your MBA and has asked for your help. The company has produced the following forecasts for the next 5 years (R'000): FY1 5,300 FY FY3 FY4 FY5 5,500 5,900 6,400 7,000 800 900 950 1,000 1,100 +700 -300 -450 -550 +650 -1,200 -1,300 -500 -900 +450 5,600 4,800 5,900 5,950 9,200 Jomens (Pty) Ltd is an innovative technology company. They have experienced reasonable growth over the last few years and have consulted you as they face several key decisions. The Owners' Equity and Liabilities section of the balance sheet of the company on 31st December 2021 is as follows: Share Capital Retained Income Total Owners' Equity Preference Shares Loan from Bank Total Owners' Equity + Debt 1,000,000 19,000,000 20,000,000 Profit after Tax Depreciation Change in Net Working Capital Net Capital Expenditures Free Cash Flows 5,000,000 10,000,000 35,000,000 The Ordinary Shares consist of 1,000,000 ordinary shares with a par value of R10 each. The owners, who also own the company, are contemplating listing the business on the JSE Alternative Exchange in order to raise funds to fund further expansion. They are unsure as to what list price they should be asking for. You know one of the owners personally and he knows you recently completed your MBA and has asked for your help. The company has produced the following forecasts for the next 5 years (R'000): FY1 5,300 FY FY3 FY4 FY5 5,500 5,900 6,400 7,000 800 900 950 1,000 1,100 +700 -300 -450 -550 +650 -1,200 -1,300 -500 -900 +450 5,600 4,800 5,900 5,950 9,200

Answer rating: 100% (QA)

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