1 AMBEN LTD INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2012 2011 $'000 $'000 $'000 $000 Sales 5,700 5,300 Cost of sales 4,330 4,000 Gross Profit 1,370 1,300 Administration cost 735 620 635 680 Operating profit Interest Profit before taxation 220 190 415 490 Taxation 125 147 290 343 Profit after taxation Preference dividends 90 90 Ordinary dividends 140 140 230 230 Retained earnings 60 113 Statement of Financial Position as at 31 December 2012 2011 $'000 $1000 3'000 $'000 3000 $'000 Non-Current Assets Current Assets: 5.405 4,880 Inventory 900 880 Account Receivable Cash 460 55 460 60 1,415 1,400 Current Liabilities Account payable 425 190 Bank 800 Tagation 155 110 Dividends 230 230 810 1,330 605 70 Net current assets Total Assets less current liabilities Long-term liabilities 6,010 4,950 Debentures 1,100 1,100 Bank loan 1,000 2.100 1,100 3,910 3,850 Capital and reserves: Ordinary shares, par value $1 1,500 1,500 Preference shares, par value $1. 1,000 1,000 Share Premium 500 500 Reserves 910 850 3,910 3,850 - 21 [ . 11 No Spac... Heading 1 Heading 2 aby-A 1 Normal Title Paragraph Styles 1T2 1 (a) The finance director is concerned about the company falling into overtrading position. Calculate appropriate ratios which determine overtrading position of a company. Hint: 5 ratios are required to answer this question. 1 (b) Describe three (3) strategies that could be followed by a company seeking to deal with the problem of overtrading. Question 2. Calculate the following values assuming a discount (interest) rate of 12 per cent: (2) 500 compounded for five years. (b) the present value of 500 to be received in five years' time. (c) the present value of 500 received each year for ever. (d) the present value of 500 to be received each year for the next five years. 1 AMBEN LTD INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2012 2011 $'000 $'000 $'000 $000 Sales 5,700 5,300 Cost of sales 4,330 4,000 Gross Profit 1,370 1,300 Administration cost 735 620 635 680 Operating profit Interest Profit before taxation 220 190 415 490 Taxation 125 147 290 343 Profit after taxation Preference dividends 90 90 Ordinary dividends 140 140 230 230 Retained earnings 60 113 Statement of Financial Position as at 31 December 2012 2011 $'000 $1000 3'000 $'000 3000 $'000 Non-Current Assets Current Assets: 5.405 4,880 Inventory 900 880 Account Receivable Cash 460 55 460 60 1,415 1,400 Current Liabilities Account payable 425 190 Bank 800 Tagation 155 110 Dividends 230 230 810 1,330 605 70 Net current assets Total Assets less current liabilities Long-term liabilities 6,010 4,950 Debentures 1,100 1,100 Bank loan 1,000 2.100 1,100 3,910 3,850 Capital and reserves: Ordinary shares, par value $1 1,500 1,500 Preference shares, par value $1. 1,000 1,000 Share Premium 500 500 Reserves 910 850 3,910 3,850 - 21 [ . 11 No Spac... Heading 1 Heading 2 aby-A 1 Normal Title Paragraph Styles 1T2 1 (a) The finance director is concerned about the company falling into overtrading position. Calculate appropriate ratios which determine overtrading position of a company. Hint: 5 ratios are required to answer this question. 1 (b) Describe three (3) strategies that could be followed by a company seeking to deal with the problem of overtrading. Question 2. Calculate the following values assuming a discount (interest) rate of 12 per cent: (2) 500 compounded for five years. (b) the present value of 500 to be received in five years' time. (c) the present value of 500 received each year for ever. (d) the present value of 500 to be received each year for the next five years