Three You are a graduate from one of the reputable universities in Ghana with BSc Accounting degree
Question:
Three You are a graduate from one of the reputable universities in Ghana with BSc Accounting degree working with one of the finance houses in Accra that specializes in provision of project capital support to medium to large firms. Your institution recently received an application for project financing from Gbadago Enterprise Limited. This application has been assigned to your team for initial evaluation and analysis. Enclosed with the application package is Gbadago Enterprise Limited's Common Size Statement of Financial Position for the years ended 31st December as set out below:
Required:
a) As the team head, you are required to present a project report that set out your evaluation of the financial performance of Gbadago Enterprise Limited for the relevant years. You are to ensure that, your evaluation report covers profitability, liquidity and gearing analysis as well as your recommendations (if any) and basis of the recommendations.
b) Enumerate at least four (4) limitations of financial ratios. (4 marks)
c) Explain why Gbadago Enterprise Limited seeks for external sources of finance despite its high amount of retained earnings?
Microeconomics Theory and Applications with Calculus
ISBN: 978-0133019933
3rd edition
Authors: Jeffrey M. Perloff