A.Using the following information (ATTACHED) conduct ratio analysis and determine;
Liquidity ratios (Current Ratio, Quick Ratio, Debt to Equity Ratio, Interest Coverage Ratio)
Profitability ratios (Return on Assets (ROA), Return on Equity (ROE), Profit Margin)
Investment ratios (Price-to-Earnings Ratio (P/E) , Dividend Yield, Dividend Payout Ratio)
Explain how every ratio (Above) influences your investment decision.
B.Conduct a trend analysis for the last five years in relation to revenues and net earnings of the firm.
C.Conclusion. Based on your analysis, would you be interested in investing
D.Determine the capital structure of the company before the issue of shares and compare to the capital structure after the issue. Explain how the change in the capital structure of the firm influences your investment decision.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2019 2019 2018 Notes Shs'000 Shs'000 CAPITAL EMPLOYED Share capital 13 150,000 150,000 Other reserves 11 6, 127,936 3,207,206 Retained earnings 4,092,044 1,729,892 Proposed dividends 12 (i) 200,000 120,000 Shareholders' funds 10,569,980 5,207,098 REPRESENTED BY: Assets Property and equipment 14 581,420 520,933 Intangible assets 15 91,878 78,098 Investment property 16 1,173,571 1,092,785 Available for sale quoted investments 17(ii) 5,979,690 3,282,105 Financial assets at fair value through profit or loss: quoted ordinary shares 17(i) 7,535,861 4,608,842 - unquoted ordinary shares 18 50,490 government securities 24(i) 361,360 523,561 - unit trusts 25 4,265,612 2,122,003 Government securities held to maturity 24(ii) 2, 109,214 1,573,543 Corporate bond held to maturity 305,717 287,848 Mortgage loans 19 576,464 659,877 Loans to policy holders 20 303,418 357,789 Receivables arising out of reinsurance arrangements 10,081 54,090 Receivables arising out of direct insurance arrangements 161,277 196,757 Reinsurers' share of insurance liabilities 21 463,893 275,956 Receivables from related parties 41 2,696 33,060 Deferred acquisition costs 22 73,461 52,941 Deferred income tax 36 11,789 22,662 Current income tax receivable 13,785 Other receivables 23 388,547 159,492 Deposits with financial institutions 39 500, 102 206,640 Cash and bank balances 20 415,376 193,040 Total assets 25,361,917 16,315,807 Liabilities Insurance contract liabilities Amount payable under deposit administration contracts 27 6,346,198 4,950,516 33 3,268,977 2,754,617 Liabilities under investment contracts 32 3, 183,016 1,640,902 Unearned premium 35 715,745 567,373 Creditors arising from reinsurance arrangements 50,011 17,334 Retirement benefit liability 43 25,715 35,433 Bank loan 34 749,318 747,618 Other payables 37 418,408 283,764 Dividends payable 60,00 Overdraft 39 1,360 51,152 Current income tax payable 23,189 Total liabilities 4,791,937 1 1, 108,709 Net assets 10,569,980 5,207,098F inancial Statements COMPANY STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2019 2019 2018 Notes Shs'OOO Shs'000 CAPITAL EMPLOYED Share capital 13 150,000 150,000 Retained earnings 3,330,535 1,223,625 Proposed dividend 200,000 120,000 Shareholders' mds 3 680 535 1,493,625 REPRESENTED BY: Assets Property and equipment 14 3,989 4,784 Intangible assets 15 197 197 Investment in subsidiary companies 42 760,000 560,000 Financial assets at fair value through prot or loss 17(i) 4,380,171 2,354,048 Receivables from related parties 41 25,303 20,900 Other receivables 23 4,500 - Deposit with nancial institutions 8,490 5,873 Cash and bank balances 10,407 2,077 Total assets 5 193 057 2 947 879 Liabilities Bank loan 34 749,318 747,618 Amounts clue to related parties 41 751,465 640,505 Dividends payable - 60,000 Other paxables 37 1 1,739 6,131 Total liabilities 1,512,522 1,454 254 Net assets 3,680,535 1,493,625
