Calculate and comment on the Capital Structure of the company. Note - use vertical and horizontal analysis to support your answer (10 Marks)
The following financial statements will be tabled at the next management meeting. Use the financial statements and answer question 3 and 4. Statement of comprehensive income for the period ending 28 February 2020 Feb-18 R Feb-19 R Feb-20 R Sales (revenue) 16 706 187 18 377 726 21 093 462 Cost of Sales 9 278 185 11 331 528 14 056 528 Gross profit 7 428 002 7 046 198 7 036 934 Expenses 4 961 835 5 304 780 6 018 701 2 466 167 1741 418 1 018 233 Earnings before interest and tax (EBIT) (Operating profit) Interest 250 565 250 565 250 565 Profit before tax (PBT) Tax Profit after tax Earnings per share (EPS) cents Dividends Assets: Non-current assets Property, plant and equipment Motor vehicles Investment in Blue Crane investments Current Assets: Inventory Trade receivables Cash And bank Total Assets Equity and Liabilities Equity Ordinary shares (1500000 shares @ R1 each) Retained income Non-Current Liabilities: Long term loan Bonds 2 215 602 1 490 853 620 369 417 439 1 595 233 1 073 414 73.02 38.23 500 000 500 000 Statement of financial Position as at 28 February 2020 Feb-18 R Feb-19 R 7 939 514 7927 365 5 870 570 6 250 657 1568 944 1176 708 500 000 500 000 4 173 382 5 060 288 1143 886 1241 811 2 288 519 2 769 246 740 977 1049 231 12 112 896 12 987 653 6096 109 6 669 523 1 500 000 1 500 000 4 596 109 5 169 523 5 000 000 5 200 500 3 500 000 3 700 500 1 500 000 1 500 000 767 668 214 947 552 721 3.51 500 000 Feb-20 R 7 008 122 5 625 591 882 531 500 000 5 946 475 1617 463 3 467 418 861 594 12 954 597 6722 244 1 500 000 5 222 244 5 000 000 4 100 000 900 000 Current Liabilities: Trade Creditors 1 016 787 1 117 630 1 232 353 Total Equity and Liabilities 12 112 896 12 987 653 12 954 597 Question 3: (10) Calculate and comment on the capital structure of the company. (Note: use vertical and horizontal analysis to support your answer). The following financial statements will be tabled at the next management meeting. Use the financial statements and answer question 3 and 4. Statement of comprehensive income for the period ending 28 February 2020 Feb-18 R Feb-19 R Feb-20 R Sales (revenue) 16 706 187 18 377 726 21 093 462 Cost of Sales 9 278 185 11 331 528 14 056 528 Gross profit 7 428 002 7 046 198 7 036 934 Expenses 4 961 835 5 304 780 6 018 701 2 466 167 1741 418 1 018 233 Earnings before interest and tax (EBIT) (Operating profit) Interest 250 565 250 565 250 565 Profit before tax (PBT) Tax Profit after tax Earnings per share (EPS) cents Dividends Assets: Non-current assets Property, plant and equipment Motor vehicles Investment in Blue Crane investments Current Assets: Inventory Trade receivables Cash And bank Total Assets Equity and Liabilities Equity Ordinary shares (1500000 shares @ R1 each) Retained income Non-Current Liabilities: Long term loan Bonds 2 215 602 1 490 853 620 369 417 439 1 595 233 1 073 414 73.02 38.23 500 000 500 000 Statement of financial Position as at 28 February 2020 Feb-18 R Feb-19 R 7 939 514 7927 365 5 870 570 6 250 657 1568 944 1176 708 500 000 500 000 4 173 382 5 060 288 1143 886 1241 811 2 288 519 2 769 246 740 977 1049 231 12 112 896 12 987 653 6096 109 6 669 523 1 500 000 1 500 000 4 596 109 5 169 523 5 000 000 5 200 500 3 500 000 3 700 500 1 500 000 1 500 000 767 668 214 947 552 721 3.51 500 000 Feb-20 R 7 008 122 5 625 591 882 531 500 000 5 946 475 1617 463 3 467 418 861 594 12 954 597 6722 244 1 500 000 5 222 244 5 000 000 4 100 000 900 000 Current Liabilities: Trade Creditors 1 016 787 1 117 630 1 232 353 Total Equity and Liabilities 12 112 896 12 987 653 12 954 597 Question 3: (10) Calculate and comment on the capital structure of the company. (Note: use vertical and horizontal analysis to support your answer)
