Kenya Kwanza ltd wants to determine its liquidity position in 5 years from closure of business in year 2023. The financial position as at December 2023 was:

Balance sheet as at 31 December, 2023

Fixed assets:	Ksh. '000'	Ksh. '000'
Freehold premises	1,680,000
Leasehold premises	1,200,000
Plant and equipment	1,120,000
Motor vehicles	600,000	4,600,000
Current assets:
Stocks	2,120,000
Debtors	880,000
Bank balance	240,000	3,240,000
		7,840,000
Capital & liabilities:
Creditors	1,440,000
Accrued expenses	1,120,000
Ordinary share capital	4,000,000
Reserves	380,000
15% loan	900,000	7,840,000
		7,840,000

Additional information:

1. The loan will mature before the end of the 5 year period and will be duly settled.

2. Sales for year 2023 amounted to ksh 16,000m and are expected to grow by 8% per year in each of the five years from 2024 to 2028.

3. Dividend payout ratio of 40% is to be maintained.

4. Profit after tax is to be maintained at 14% of sales

5. Except for the ordinary share capital and reserves, all the remaining balance sheet items are to maintain their current (2023) percentage of sales

Required:

Determine the Total Sources of funds as at December 2028.

Answer rating: 100% (QA)

Answer To determine the Total Sources of Funds as at December 2028 we need to project the balance sheet items over the next 5 years based on the given ... View the full answer