Notes and additional information:

$1\mathrm{.}1.90\%$ of revenue is generated on credit sales to contractual corporate customers, while

$10\%$ is generated from sales to $$pay$-$as$-$we$-$deliver$$ household customers.

$1\mathrm{.}2.$ Cost of services rendered does not include any once$-$off or exceptional expenses.

$1\mathrm{.}3.$ Other operating expenses include depreciation and amortisation charges of R$15,72$ million

$(2023$: R$15,96$ million$).$

$1\mathrm{.}4.$ Deliveries Galore has $2,5$ million shares in issue and on $28$ February $2024,$ these shares

were trading at R$30$ each.

$1\mathrm{.}5.$ On $28$ February $2024,$ the market value of the long$-$term loan was R$28,2$million.

$1\mathrm{.}6.$ All the preference shares will be redeemed on $28$ February $2028$ at $4\%$ discount on par

value. On $28$ February $2024,$ the market$-$related cost of similar redeemable preference

shares was $12\%.$ The par value of each preference share is R$4,80.$

$1\mathrm{.}7.$ All corporate customers are required to pay a $$courier deposit$$ as security for the afforded

credit facility. Upon cancellation of any corporate customer contract, the courier deposit is

repaid in full.

$1\mathrm{.}8.$ As at $28$ February $2024,$ the market$-$related cost of equity was $12,5\%$ and the marketrelated cost of the long$-$term loan was $16\%.$

$1\mathrm{.}9.$ All dividends are declared on $28$ February and subsequently paid on $15$ July in the

following year

$($a$)$ For question $2($a$)$ only, assume that Deliveries Galore uses book values and closing

balances when calculating and analysing the ratios:

Calculate the following ratios for both the $2024$ and the $2023$ financial years and provide

a possible reason for each movement:

$($i$)$ Trade receivable collection period

$($ii$)$ Gross profit margin $(\%)$

$(4)$

$(4)$

$($iii$)$ EBITDA margin

$($iv$)$ Ordinary dividend payout ratio

$(4)$

$(4)$

$($iv$)$ Asset turnover ratio $(4)$

$($b$)$ Provide one possible reason why Deliveries Galore$$s working capital management would

not include the management of trading inventory. $(1)$

$($c$)$ Calculate Deliveries Galore$$s weighted average cost of capital $($WACC$)$ as at $28$

February $2024.(12)$

$($d$)$ From the information provided, discuss the non$-$financial risks that Deliveries Galore

might be facing. $(2)$