Sales Cost of Sales Gross Profit Selling & Marketing Expenses Administrative Expenses Interest Income Angostura Holdings...

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Sales Cost of Sales Gross Profit Selling & Marketing Expenses Administrative Expenses Interest Income Angostura Holdings Limited Income Statements For the years ended December 31, 2021 & 2022 2021 ('000s) 921,599 (488,902) 432,697 (153,299) (87,128) 16,040 2022 (000s) 1,029,910 (552,483) 477,427 (180,310) (102,733) Other Income/(Expenses) 7,374 21,421 (10,158) Earnings before Interest & Taxes 215,684 205,647 Interest Expense (1,210) (1,651) Taxable Income 214,474 203,996 Taxation Net Income (56,155) 158,319 (58,759) 145,237 Dividends Paid Addition to Retained Earnings 95,569 49,668 2021 (000s) Angostura Holdings Limited Statement of Financial Position As at December 31, 2021 & 2022 2022 ('000s) 2021 ('000s) 2022 ('000s) ASSETS Current Assets LIABILITIES & EQUITY Current Liabilities Inventories Accounts Receivables. 322,000 168.029 430,832 Accounts Payables 130,103 145,329 203,479 Short-term Loan 50,000 Other Current Assets 500,743 374,648 Other Current Liabilities 9,839 15,113 Cash & Equivalents 144.063 108,542 139,942 210,442 1,134,835 1,117,501 Non-current Liabilites. 102,327 101,867 Non Current Assets, Net 442,148 581,285 Total Liabilities 242,269 312.309 Equity Share Capital Other Reserves 218,833 220,928 Retained Earnings 1,115,881 1,165,549 Total Equity 1,334,714 1,386,477 TOTAL ASSETS 1,576,983 1,698,786 TOTAL LIAB. & EQUITY 1,576,983 1,698,786 ADDITIONAL NOTES to FINANCIAL STATEMENTS: Depreciation Expense for 2022 = $22,807 ('000) Common Stock = Share Capital & Other Reserves Question 1 Total: 20 Marks (a) Is it ethical for companies, like Angostura, to sell a product (alcohol) that is known to be addictive and a possible danger to the health of the user? Is it relevant that the product is legal. (4 Marks) (b) Using the financial statements provided, compute the following financial leverage ratios for Angostura for 2021 and 2022. i. Debt to Equity ii. Total Debt ratio iii. Times Interest Earned ratio (3 Marks) (3 Marks) (2 Marks) (3 Marks) iv. Cash Coverage ratio (c) Using the results of your calculation in part b (i-iv) above, perform a trend analysis on Angostura's financial leverage ratios. This analysis should include: i. discussion on if these ratios improved or deteriorated between 2021 and 2022; ii. (A) possible reason(s) for the improvement or deterioration; iii. An indication of what the total debt ratio and the times interest earned ratios measure/suggest about the company for 2022. (5 Marks) Question 2 Total: 20 Marks As part of your analysis, you are required to investigate Angostura's cash flows. (a) Using the financial statements and additional notes provided, calculate the following for 2022: Operating Cash Flow i. ii. Net Capital Spending iii. Change in Net Working Capital iv. Cash Flow from assets (2.5 Marks) (2.5 Marks) (3 Marks) (2 Marks) (b) Prepare Angostura's Statement of Cash Flow for the year ended December 31, 2022. (10 Marks) Sales Cost of Sales Gross Profit Selling & Marketing Expenses Administrative Expenses Interest Income Angostura Holdings Limited Income Statements For the years ended December 31, 2021 & 2022 2021 ('000s) 921,599 (488,902) 432,697 (153,299) (87,128) 16,040 2022 (000s) 1,029,910 (552,483) 477,427 (180,310) (102,733) Other Income/(Expenses) 7,374 21,421 (10,158) Earnings before Interest & Taxes 215,684 205,647 Interest Expense (1,210) (1,651) Taxable Income 214,474 203,996 Taxation Net Income (56,155) 158,319 (58,759) 145,237 Dividends Paid Addition to Retained Earnings 95,569 49,668 2021 (000s) Angostura Holdings Limited Statement of Financial Position As at December 31, 2021 & 2022 2022 ('000s) 2021 ('000s) 2022 ('000s) ASSETS Current Assets LIABILITIES & EQUITY Current Liabilities Inventories Accounts Receivables. 322,000 168.029 430,832 Accounts Payables 130,103 145,329 203,479 Short-term Loan 50,000 Other Current Assets 500,743 374,648 Other Current Liabilities 9,839 15,113 Cash & Equivalents 144.063 108,542 139,942 210,442 1,134,835 1,117,501 Non-current Liabilites. 102,327 101,867 Non Current Assets, Net 442,148 581,285 Total Liabilities 242,269 312.309 Equity Share Capital Other Reserves 218,833 220,928 Retained Earnings 1,115,881 1,165,549 Total Equity 1,334,714 1,386,477 TOTAL ASSETS 1,576,983 1,698,786 TOTAL LIAB. & EQUITY 1,576,983 1,698,786 ADDITIONAL NOTES to FINANCIAL STATEMENTS: Depreciation Expense for 2022 = $22,807 ('000) Common Stock = Share Capital & Other Reserves Question 1 Total: 20 Marks (a) Is it ethical for companies, like Angostura, to sell a product (alcohol) that is known to be addictive and a possible danger to the health of the user? Is it relevant that the product is legal. (4 Marks) (b) Using the financial statements provided, compute the following financial leverage ratios for Angostura for 2021 and 2022. i. Debt to Equity ii. Total Debt ratio iii. Times Interest Earned ratio (3 Marks) (3 Marks) (2 Marks) (3 Marks) iv. Cash Coverage ratio (c) Using the results of your calculation in part b (i-iv) above, perform a trend analysis on Angostura's financial leverage ratios. This analysis should include: i. discussion on if these ratios improved or deteriorated between 2021 and 2022; ii. (A) possible reason(s) for the improvement or deterioration; iii. An indication of what the total debt ratio and the times interest earned ratios measure/suggest about the company for 2022. (5 Marks) Question 2 Total: 20 Marks As part of your analysis, you are required to investigate Angostura's cash flows. (a) Using the financial statements and additional notes provided, calculate the following for 2022: Operating Cash Flow i. ii. Net Capital Spending iii. Change in Net Working Capital iv. Cash Flow from assets (2.5 Marks) (2.5 Marks) (3 Marks) (2 Marks) (b) Prepare Angostura's Statement of Cash Flow for the year ended December 31, 2022. (10 Marks)