Answers to the following:

Your second task is to analyse Solaris leverage, focusing on the relationship between debt and the value of the company attributable to shareholders, as well as on cash interest cover. Calculate and interpret the trends including possible reasons. [8 marks]

Due to the COVID pandemic, in recent months Solaris has suffered disruption to their earlier positive trend in sales and profitability. The company is therefore in need of additional external financing. Based on your analysis in part b) above, explain how these developments would impact the companys leverage. [5 marks]

Solaris decides to proceed with a global digital investor roadshow for a 9-year USD100 million green bond. Explain why this debt instrument may be a good funding option for Solaris and discuss the growth drivers for this field of finance. [7 marks]

Question 2 a) A world-leading producer of solar panels, Solaris BV, has enjoyed increased demand for its products in recent years. You are a finance professional who has been asked to perform a thorough analysis of Solaris. Your first step is to complete the company's financial statements by adding the missing information indicated by letters A-E. (5 marks) 2020 2019 50.7 25.2 33.9 15.0 Solaris Plc Income Statement at 31 March (EUR millions) Sales Cost of sales Gross profit Operating expenses Depreciation Operating profit Interest expenses Profit before tax 25.5 A 0.4 21.8 18.9 2.7 0.4 15.8 4.8 17.0 2.5 13.3 Taxation Net Income 2.4 14.6 2.7 B 2020 2019 2020 2019 Solaris Plc Statement of financial position at 31 March (EUR millions) 14.4 16.8 11.1 6.0 Cash and short-term investments Accounts receivable Inventories 3.6 11.1 6.0 Trade payables and other current liabilities Total current liabilities Non-current borrowings and bonds Total non-current liabilities Total liabilities 6.0 294.0 1.2 609.0 Other current assets 0.3 0.3 609.0 294.0 Total current assets 21.9 21.9 620.1 300.0 Land D 120.0 120.0 0.3 738.9 Share capital Retained earnings Plant and machinery 413.7 21.0 E Total non-current assets 739.2 414.0 Total equity 141.0 135.9 Total assets 761.1 435.9 Total liabilities and equity 761.1 435.9 A) 3.3 B) 10.6 C) 1.2 D) 0.3 E) 15.9 Question 2 a) A world-leading producer of solar panels, Solaris BV, has enjoyed increased demand for its products in recent years. You are a finance professional who has been asked to perform a thorough analysis of Solaris. Your first step is to complete the company's financial statements by adding the missing information indicated by letters A-E. (5 marks) 2020 2019 50.7 25.2 33.9 15.0 Solaris Plc Income Statement at 31 March (EUR millions) Sales Cost of sales Gross profit Operating expenses Depreciation Operating profit Interest expenses Profit before tax 25.5 A 0.4 21.8 18.9 2.7 0.4 15.8 4.8 17.0 2.5 13.3 Taxation Net Income 2.4 14.6 2.7 B 2020 2019 2020 2019 Solaris Plc Statement of financial position at 31 March (EUR millions) 14.4 16.8 11.1 6.0 Cash and short-term investments Accounts receivable Inventories 3.6 11.1 6.0 Trade payables and other current liabilities Total current liabilities Non-current borrowings and bonds Total non-current liabilities Total liabilities 6.0 294.0 1.2 609.0 Other current assets 0.3 0.3 609.0 294.0 Total current assets 21.9 21.9 620.1 300.0 Land D 120.0 120.0 0.3 738.9 Share capital Retained earnings Plant and machinery 413.7 21.0 E Total non-current assets 739.2 414.0 Total equity 141.0 135.9 Total assets 761.1 435.9 Total liabilities and equity 761.1 435.9 A) 3.3 B) 10.6 C) 1.2 D) 0.3 E) 15.9