Question 1 10 marks

State and briefly explain the three (3) fundamental principles of financial management.

Question 2 12 marks

Name any 6 users of financial statements and state what they would the information for.

Question 3 14 marks

Statement of Financial Performance of Gama (Pty) Ltd for the year ended 30 September 2019 N$ Sales 200 000.00 Cost of Sales 120 000.00 Gross Profit 80 000.00 Operating Expenses 60 000.00 Net Profit before Tax 20 000.00 Additional Information i) Interest paid N$ 2 000.00 ii) Taxation rate 25% iii) Opening Inventory N$ 16 000.00 iv) 50% of the sales are sold on credit v) All purchases are on credit vi) Number of ordinary shares in issue 25 000 shares vii) Market price per share N$2,510 viii) One year has 365 days Statement of Financial Position of Gama (Pty) Ltd as at 30 September 2019 Capital Employed N$ Share Capital 100 000.00 Retained Earnings 40 000.00 Long Term Loan 20 000.00 160 000.00 Employment of Capital Fixed Assets 100 000.00 Current Assets 100 000.00 Inventory Trade Receivables Bank 24 000.00 60 000.00 16 000.00 Current Liabilities 40 000.00 Trade payables 40 000.00 Networking Capital 60 000.00 160 000.00

Make use of the Financial Statements and additional information provided above to calculate the following ratios:

a) Earnings Per Share (EPS)

b) Quick ratio

c) Interest cover (times interest earned)

d) Inventory turnover

e) Return on Equity.

Question 4 14 marks

From the information provided below compute the following:

a) Break-even point in units (4)

b) Break-even point in monetary terms (3)

c) The margin of safety ratio (3)

d) The break-even point in units if a commission of N$20 is paid. (4)

Van Vuuren Incorporated CC: Expected turnover in units 40 000 units

Selling price per unit N$ 100

Total Fixed Costs N$ 1 000 000

Total Variable Costs N$ 2 000 000