Madina Ltd is engaged in the processing of palm fruits to produce palm oil and palm...
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Madina Ltd is engaged in the processing of palm fruits to produce palm oil and palm kernel oil. The financial statements of the company for the years ended 31st December 2020 and 2021 are as follows: Statement of Profit or Loss for the year ended Revenue Cost of sales Net gains from changes in fair value of biological assets Gross profit Administrative expenses Other income Operating profit Finance income Profit before income tax Income tax expense Profit for the year Statement of Financial Position as at Assets Non-current assets Property plant & equipment Financial asset Current assets Inventories Trade Receivables Cash and cash equivalents Total assets Equity & Liabilities: Share capital Retained Earnings Non-current liability Deferred taxation 2021 GH₂000 123,817 (84,940) 84 38,961 (11,727) 1,267 28,501 888 29,389 (4,692) 24,697 2021 GH₂000 57,909 5,221 63,130 8,490 24,663 22,832 55,985 119.115 2,000 97,634 99,634 9,394 9.394 2020 GH₂000 95,620 (76,240) 754 20,134 (8,494) 927 12.567 508 13,075 (3,422) 9,653 2020 GH₂000 49.471 5,137 54,608 9,370 18,304 10,618 38,292 92,900 2,000 74,851 76,851 5,759 5.759 Current liabilities Accrued expenses Trade payables Current income tax liabilities Inventory turnover (days) Trade receivables collection (days) Trade payables settlement (days) 23.52 29.57 22.16 Total equity & liabilities The following ratios have been gathered from the food and processing industry for the year ended 31 December 2021: Return on Equity (%) Gross profit margin (%) Net profit margin (%) Current ratio (times) Acid test ratio (times) 2.5 1.8 20 68 477 6,957 2,653 10,087 119,115 32 203 9.403 684 10,290 92.900 Required: Write a report to the Board of Directors of Madina Ltd, assessing the company's performance for the year ended 31 December 2021 in relation to the industry and the comparative year. (Total: 20 marks) Madina Ltd is engaged in the processing of palm fruits to produce palm oil and palm kernel oil. The financial statements of the company for the years ended 31st December 2020 and 2021 are as follows: Statement of Profit or Loss for the year ended Revenue Cost of sales Net gains from changes in fair value of biological assets Gross profit Administrative expenses Other income Operating profit Finance income Profit before income tax Income tax expense Profit for the year Statement of Financial Position as at Assets Non-current assets Property plant & equipment Financial asset Current assets Inventories Trade Receivables Cash and cash equivalents Total assets Equity & Liabilities: Share capital Retained Earnings Non-current liability Deferred taxation 2021 GH₂000 123,817 (84,940) 84 38,961 (11,727) 1,267 28,501 888 29,389 (4,692) 24,697 2021 GH₂000 57,909 5,221 63,130 8,490 24,663 22,832 55,985 119.115 2,000 97,634 99,634 9,394 9.394 2020 GH₂000 95,620 (76,240) 754 20,134 (8,494) 927 12.567 508 13,075 (3,422) 9,653 2020 GH₂000 49.471 5,137 54,608 9,370 18,304 10,618 38,292 92,900 2,000 74,851 76,851 5,759 5.759 Current liabilities Accrued expenses Trade payables Current income tax liabilities Inventory turnover (days) Trade receivables collection (days) Trade payables settlement (days) 23.52 29.57 22.16 Total equity & liabilities The following ratios have been gathered from the food and processing industry for the year ended 31 December 2021: Return on Equity (%) Gross profit margin (%) Net profit margin (%) Current ratio (times) Acid test ratio (times) 2.5 1.8 20 68 477 6,957 2,653 10,087 119,115 32 203 9.403 684 10,290 92.900 Required: Write a report to the Board of Directors of Madina Ltd, assessing the company's performance for the year ended 31 December 2021 in relation to the industry and the comparative year. (Total: 20 marks)
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Answer rating: 100% (QA)
To assess the companys performance using both industry and company ratios well compare each ratio to the industry average and provide an analysis 1 Return on Equity ROE Company ROE 2479 Industry ROE 2... View the full answer
Related Book For
Intermediate Accounting
ISBN: 978-1260481952
10th edition
Authors: J. David Spiceland, James Sepe, Mark Nelson, Wayne Thomas
Posted Date:
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