QUESTION $1(25$ Marks$)$

Pulse Limited specializes in custom$-$made leather products. The company has $5$million authorized ordinary

shares at a par value of R$50.$ The bookkeeper has finalized the financial statements for Pulse Limited for the

financial year that ended on $31$ August $2024,$ on which date the market value per share was R$180.$ In

alignment with governance best practices, the Board of Directors has identified key reporting areas that must

be addressed during their quarterly meetings. These focus areas are designed to provide a comprehensive

overview, allowing the Board to thoroughly evaluate stakeholder compliance, monitor risk exposure, and

assess the effectiveness of risk management strategies. By incorporating these specialized reporting fields

into their review process, the Board can make informed decisions that align with the organization$$s strategic

objectives while ensuring robust compliance and risk oversight.

Statement of Comprehensive Income for the financial year ended $31$ August $2024$

$2024$

R$000$

$2023$

R$000$

Turnover $156000132000$

Cost of Sales $(78500)(58000)$

Gross Profit $7750074000$

Other Operating Income $315250$

Operating Expenses $(52650)(39850)$

Operating Profit $2516534400$

Investment Income $1512$

Finance Cost $(180)(132)$

Profit before tax $2500034280$

Taxation $(6750)(9256)$

Profit after tax $1825025024$

Ordinary Dividend $(3650)(5006)$

Retained earnings for the year $1460020018$

Statement of Financial Position as at $31$ August $2024$

Assets

$2024$

R$000$

$2023$

R$000$

Non$-$Current Assets

Property, Plant and Equipment $219000198500$

Long$-$term Investment $210150$

Intangible Assets $4050$

$219250198700$

Current Assets

Inventories $85507800$

Trade Receivables $1700011500$

Other receivables $6501250$

Taxation receivable $380-$

Short$-$term loans receivable $8001500$

Cash and Cash Equivalents $38706250$

$3125028300$

Total Assets $250500227000$

Equity and Liabilities

Ordinary Share Capital $150000150000$

Reserves $55005500$

Retained Earnings $7220050300$

Ordinary Shareholder's Equity $227700205800$

Non$-$Current Liabilities

Long$-$term loan $25003200$

Deferred tax $150300$

$26503500$

Current Liabilities

Trade Payables $1350012000$

Other payables $35001200$

Taxation Payable $-700$

Dividends Payable $26003200$

Short$-$term loans $550600$

$2015017700$

Total Equity and Liabilities $250500227000$

Required:

Based on the financial statements prepared by the bookkeeper, calculate the following ratios for the $2024$

financial year to be included in the quarterly financial oversight report to the board of directors. Rounding to

two decimal places is required. Ensure that the correct unit of measure is considered in each calculation.

$1\mathrm{.}1$ Return on Equity $(3$ Marks$)$

$1\mathrm{.}2$ Net Profit Margin $(3$ Marks$)$

$1\mathrm{.}3$ Acid$-$Test Ratio $(3$ Marks$)$

$1\mathrm{.}4$ Trade Receivables Turnover Time $(3$ Marks$)$

$1\mathrm{.}5$ Debt$-$to$-$Assets Ratio $(3$ Marks$)$

$1\mathrm{.}6$ Earnings per Share $(3$ Marks$)$

$1\mathrm{.}7$ As part of the financial oversight report, the board of directors require an assessment of whether the

stakeholders will accept the issue of an additional $15\%$ of ordinary shares if the current shareholders

agreement require a minimum PE ratio of $30.$