QUESTION $1$

$(25$ MARKS$)$

Study the Statement of Comprehensive Income of Colatonic Ltd for $2023$ and $2022$ and answer the following questions:

$1\mathrm{.}1$ What evidence does the statement of comprehensive income for the year ended $31$ December $2023$ provide for each of the following? $($Include calculations to support your answer.$)$

$1\mathrm{.}1\mathrm{.}1$ Increase in investment of R$400000(3$ marks$)$

$1\mathrm{.}1\mathrm{.}2$ Increase in the loan balance of R$400000(3$ marks$)$

$1\mathrm{.}2$ If the return on capital employed of Colatonic Ltd is greater than the interest rate on the loan how would this be interpreted by management?

$(3$ marks$)$

$1\mathrm{.}3$ Comment on the decrease in selling, general and administrative expenses. $(2$ marks$)$

$1\mathrm{.}4$ Comment on the financial result of the company. $(3$ marks$)$

$1\mathrm{.}5$ Suggest TWO $(2)$ ways in which the company can improve its net profit margin ratio. $(2$ marks$)$

$1\mathrm{.}6$ What amounts would appear in the statement of cash flows for the year ended $31$ December $2023$ in respect of the following? $($Show all calculations.$)$

$1\mathrm{.}6\mathrm{.}1$ Dividends paid $(3$ marks$)$

$1\mathrm{.}6\mathrm{.}2$ Company tax paid $(3$ marks$)$

$1\mathrm{.}6\mathrm{.}3$ Net change in cash and cash equivalents $($Also state if it is an increase or decrease.$)(3$ marks$)$