ATTEMPT BOTH OUESTIONS IN THIS PAPER OUESTION ONE: A multinational company, Mulubika Cosmetics Itd (MC) is considering awarding a franchise to a Zambian company to be as the sole distributor of all its beauty products in Zambia. Applications have been received from three (3) Zambian companies that meet the requirements. Telibe Itd is a large Solwezi based distribution company that has been in business for many years. Miguel ltd is a small niche player in the Zambian distribution market. Mayamiko ltd has been trading for a long time but is only a fraction of the size of Telibe ltd. All the three businesses have shown logistical and operational capacity to the handle the MC franchise. Therefore, the board has resolved that the final choice will be based on the relative financial strength of the three firms. Below are the key financial figures on each of the three companies vying for the franchise. STATEMENT OF FINANCIAI POCITION Page 2 of 3 REOUIRED: a) Using whatever ratios that you think is appropriate, analyze the financial figures above. (Show all the workings clearly). [10 marks] b) Based on your analysis in (a) above, explain in detail which of the three companies is most likely to be given the franchise and why? Give reasons for your choice. [20 marks] [Total 30 marks] ATTEMPT BOTH OUESTIONS IN THIS PAPER OUESTION ONE: A multinational company, Mulubika Cosmetics Itd (MC) is considering awarding a franchise to a Zambian company to be as the sole distributor of all its beauty products in Zambia. Applications have been received from three (3) Zambian companies that meet the requirements. Telibe Itd is a large Solwezi based distribution company that has been in business for many years. Miguel ltd is a small niche player in the Zambian distribution market. Mayamiko ltd has been trading for a long time but is only a fraction of the size of Telibe ltd. All the three businesses have shown logistical and operational capacity to the handle the MC franchise. Therefore, the board has resolved that the final choice will be based on the relative financial strength of the three firms. Below are the key financial figures on each of the three companies vying for the franchise. STATEMENT OF FINANCIAI POCITION Page 2 of 3 REOUIRED: a) Using whatever ratios that you think is appropriate, analyze the financial figures above. (Show all the workings clearly). [10 marks] b) Based on your analysis in (a) above, explain in detail which of the three companies is most likely to be given the franchise and why? Give reasons for your choice. [20 marks] [Total 30 marks]
