Assets 1. The following financial statements relate to Al-Husan Company, which operates a wholesale carpet business: Balance sheet as at 31 March, 2019 2018 2019 OMR OMR Non-current assets - Land and building 381,000 427,000 Fixtures and fittings 120,000 160,000 510.000 587.000 Current assets Inventories 300,000 100.000 Account receivables 240,000 273,000 Cash at bank 4.0000 544,000 679,000 Total assets 1,054,000 1.266,000 Equity and liabilities Equity OMR 0.50 ordinary 300,000 300,000 shares General reserve 263.000 234.000 $61,000 $34,000 Non-current liabilities Long-term bank loan 200,000 300,000 Current liabilities Account payables 261.000 354,000 Bank overdrup 30.000 78,000 291,600 432.000 Total equity and 1.054.000 1.266.000 Liabilities Income statement for the year ended 31 March, 2019 2018 2019 OMR OMR Nel sales 2.240.XX) 2.481,000 Cost of goods sold (1.745.001) (2.272.100) Grus profit 495.000 409,DIMI Operating expenses (252,0,00) 362,000) Operating profit 243.000 47.000 Interest and (18.000) 32.000) Profit before 225.000 15,000 taxation Taxation (60,000) (4.0001 Net Profit 165.000 Notes: 1. The market value of the shares of the business at the end of the reporting period was OMR 2.50 for 2018 and OMR 1.50 for 2019. 2. All sales and purchases are made on credit. 3. The cost of goods sold figure can be analyzed as follows: 2018 2019 OMR CMR Opening inventory 241,000 300.000 1.804.000 2.378.000 2,045,000 2,678,000 Closing inventories (30%) 0) (466. (XIC) 30x1,0 Cost of goods sold 1.745x10 2,272. AKI Purchases 4. At 31 March 2017, the trade receivables stood at OMR 223,000 and the trade payables at OMR 183,000, 5. A dividend of OMR 40,000 had been paid to the shareholders in respect of each of the years. Required: A. Choose and calculate four ratios that would be helpful in assessing the performance of Al-Husan Company. Use end- of-year values and calculate ratios for both 2018 and 2019. (4 marks) B. Compute the number of days in the cash conversion cycle for each year. (2 marks) C. Did the company manage cash more effectively in the current year? Explain. (1 mark) 0 2 3 2. Shams company is considering two projects. Each requires an initial investment of OMR 100,000. The company cost of capital is 14%. The cash inflows associated with each project are as follows: Cash intlows Year Project A Project B D.XXI 50,000 200,000 110.000 120.000 a. Calculate the NPV for each project. (2 marks) b. Which project you would recommend to the management. Explain why. (1 marks) 150.000 24,000 50,000 40.000 20.000 IS