Nikita Ltd is a family-owned clothes manufacturer based in Kabwe district. For a number of years,...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Nikita Ltd is a family-owned clothes manufacturer based in Kabwe district. For a number of years, the chairman and managing director was Nikita Kabwe. During her period of office, sales revenue had grown steadily at a rate of 2% to 3% each year Nikita Kabwe retired on 30 November 2021 and was succeeded by her daughter Nicole. Soon after taking office, Nicole decided to expand the business. Within weeks she had successfully negotiated a five-year contract with a large clothes retailer to make a range of sports and leisurewear items The contract will result in an additional K2 million in sales revenue during each year of the contract. To fulfil the contract, Nikita Ltd acquired new equipment and premises. Financial information concerning the business is given below: 2021 2022 9.2% 7.5% 1.5.1 0.81 26.4% 1 Net profit margin 2 ROCE 3. Current ratio 4. Acid test 5 Gearing ratio 6. Days receivables 7 Days payables 8. Sales revenue to capital employed Other Information 9.6% 8.3% 3.31 171 11 1% 98 days 81 days 0.9 times Annual Sales growth from 2021 to 2022 was 20% Annual growth in capital employed from 2021 to 2022 was 27% □ Increase in debt from 2021 to 2022 was 200% 137 days 165 days 0.8 times Increase in plant, property and equipment from 2021 to 2022 was 50%. No increase in share capital. Bank overdraft 2022 increased by 16 times. Inventory increased by 51% in 2022 Using the above ratios and other information, analyse the financial performance of the expansion programme. Nikita Ltd is a family-owned clothes manufacturer based in Kabwe district. For a number of years, the chairman and managing director was Nikita Kabwe. During her period of office, sales revenue had grown steadily at a rate of 2% to 3% each year Nikita Kabwe retired on 30 November 2021 and was succeeded by her daughter Nicole. Soon after taking office, Nicole decided to expand the business. Within weeks she had successfully negotiated a five-year contract with a large clothes retailer to make a range of sports and leisurewear items The contract will result in an additional K2 million in sales revenue during each year of the contract. To fulfil the contract, Nikita Ltd acquired new equipment and premises. Financial information concerning the business is given below: 2021 2022 9.2% 7.5% 1.5.1 0.81 26.4% 1 Net profit margin 2 ROCE 3. Current ratio 4. Acid test 5 Gearing ratio 6. Days receivables 7 Days payables 8. Sales revenue to capital employed Other Information 9.6% 8.3% 3.31 171 11 1% 98 days 81 days 0.9 times Annual Sales growth from 2021 to 2022 was 20% Annual growth in capital employed from 2021 to 2022 was 27% □ Increase in debt from 2021 to 2022 was 200% 137 days 165 days 0.8 times Increase in plant, property and equipment from 2021 to 2022 was 50%. No increase in share capital. Bank overdraft 2022 increased by 16 times. Inventory increased by 51% in 2022 Using the above ratios and other information, analyse the financial performance of the expansion programme.
Expert Answer:
Answer rating: 100% (QA)
SOLUTION The expansion programme of Nikita Ltd has resulted in significant changes in the financial performance of the company in 2022 compared to 202... View the full answer
Related Book For
Financial Accounting for Decision Makers
ISBN: 978-0273763451
6th Edition
Authors: Peter Atrill, Eddie McLaney
Posted Date:
Students also viewed these accounting questions
-
Bradbury Ltd is a family-owned clothes manufacturer based in the south west of England. For a number of years the chairman and managing director was David Bradbury. During his period of office, sales...
-
Below are the statements of financial position of three companies as at 31 December 2017. Bauble Jewel Gem Co Co Co GHS000 GHS000 GHS000 Non-current assets Property, plant and equipment 720 60 75...
-
The Crazy Eddie fraud may appear smaller and gentler than the massive billion-dollar frauds exposed in recent times, such as Bernie Madoffs Ponzi scheme, frauds in the subprime mortgage market, the...
-
Measured along the surface of the water, a rectangular swimming pool has a length of 15 m. along this length, the flat bottom of the pool slopes downward at an angle of 11 below the horizontal, from...
-
What specific tax-related situations may result in a conflict of interest for members in public practice under the Integrity and Objectivity Rule of the AICPA Code of Professional Conduct?
-
Infocomp Systems Lab is a research and development (R&D) company that develops computer systems and software primarily for the medical industry. The lab has proposals from its own researchers for...
-
How might knowledge of economies of scale and growth relationships among competitors assist managers in strategic planning efforts?
-
The trial balance and adjustment data of Mylas Motors, Inc., at November 30, 2012, follow: Additional data at November 30, 2012: a. Depreciation on equipment, $1,100. b. Accrued wage expense, $600....
-
Given values - 144, -192, and 96 for D x , D y , and D z respectively and D = 144. Then the solution to the system for x, y and z are? The inverse of a 3 3 matrix may be found by transposing the?
-
1. What are the advantages and disadvantages of the in-home method of selling Project Home products? 2. What other channels of distribution might Project Home use? 3. What do you think about the name...
-
One Trick Pony (OTP) incorporated and began operations near the end of the year, resulting in the following post-closing balances at December 31 Accounts Receivable laventory Deferred ovu (4 Notes...
-
Identify an interesting website with a publicly available API that returns JSON data. Analyze the data by hand, and describe one or more relational tables that you could load a portion of the data...
-
How does the market react to changes in a company's EPS? 14. How can investors use EPS to estimate future earnings and make investment decisions? 15. What are some potential challenges in accurately...
-
Describe the value of deploying a marketing performance system. What are some of the key marketing metrics applied? Consider the product you are marketing in the course. Why might you track one of...
-
(e) Find principal value of sin-1 b a-2b (f) Find value of a, b, c, d from [2+ 4-2-11 24 15c d 4c+ 3d]
-
ABC Hedge Fund employs a strategy to limit downside risk by adjusting the relative weight of long and short positions according to market conditions. What is the main benefit of this strategy?...
-
Verify that each x-value is a solution of the equation. 9 sec(x) 18 0 (a) x = 9 3 sec(7) - 18 = - 18
-
Could a set of three vectors in span all of? Explain. What about n vectors in when n is less than m? R4
-
Torrent plcs income statement for the year ended 31 December 2010 and the statements of financial position as at 31 December 2009 and 2010 are as follows: During 2010, the business spent £67...
-
The newly appointed chairman of Vorak plc has been told that considerable tension and suspicion exists between the executive and non-executive directors on the board. The executive directors question...
-
Segmental information relating to Turner plc for the year to 30 April 2010 is shown below. Required: Analyse the performance of each of the three main business segments for the year and com-ment on...
-
Bank Reconciliation (Partial)} The cash account for Feldman Company contains the following information for April: \section*{Required:} Assuming there were no deposits in transit at March 31 and that...
-
Bank Reconciliation} Valentine Investigations has the following information for its cash account: Valentine's bank statement for February contained the following information: A comparison of company...
-
What three elements make up audit risk? Define each.
Study smarter with the SolutionInn App