Microsoft Word - Document8

Question 1 (8 marks)

You are an analyst for an international investment house. You are preparing an

annual analyst?s report on Bright Star Limited after the release of its 2016 results. The summarised financial information is presented below.

Bright Star Limited	2016 R?000	2015 R?000
Cash and short-term investments		150	45
Non-current assets		2 000	1 900
Total current assets (including cash and short-term investments)		595	450
TOTAL ASSETS		2 745	2 395
Total current liabilities		450	430
Non-current liabilities		870	880
TOTAL LIABILITIES		1 320	1 310
EQUITY		1 425	1 085
Net income		550	425
Cash flows from operating activity		425	355
Cash flow from investing activity		(105)	(95)

Required:

. 1.1 For the 2016 year, calculate the aggregate actuals and accrual ratio on both the Balance Sheet and the cash flow approaches. You will need to calculate the net operating assets for 2015 and 2016. (6) ?

. 1.2 Calculate the cash component of 2016 earnings using the aggregate accruals from the cash flow approach, and comment on its meaning. (2) ?

Question 1 (8 marks) You are an analyst for an international investment house. You are preparing an annual analyst's report on Bright Star Limited after the release of its 2016 results. The summarised financial information is presented below. Bright Star Limited 2016 R'000 2015 R'000 Cash and short-term investments 150 Non-current assets 2 000 1 900 Total current assets (including cash and short-term investments) 595 450 TOTAL ASSETS 2 745 45 2 395 Total current liabilities 450 430 Non-current liabilities 870 880 TOTAL LIABILITIES 1 320 1 310 EQUITY 1 425 1 085 Net income 550 425 Cash flows from operating activity 425 355 Cash flow from investing activity (105) (95) Required: . 1.1 For the 2016 year, calculate the aggregate actuals and accrual ratio on both the Balance Sheet and the cash flow approaches. You will need to calculate the net operating assets for 2015 and 2016. (6) . 1.2 Calculate the cash component of 2016 earnings using the aggregate accruals from the cash flow approach, and comment on its meaning. (2)