CASE ANALYSIS

Chongwe Zambia Company Plc a company involved in the retail industry. You have been engaged as a Financial Consultant to conduct a detailed review of the financial performance and financial performance of the company over a five year period. You have been provided with the following extracts from the audited accounts for the period 2012 to 2016:

Chongwe Zambia Company Plc
5 year financial record
Statement of Comprehensive Income - extract
	2016	2015	2014	2013	2012
	K'000	K'000	K'000	K'000	K'000
Turnover	128,458	137,204	123,305	100,502	87,013
PBT	10,401	9,287	21,694	15,463	14,093
Taxation	(3,868)	(3,679)	(8,880)	(6,136)	(4,942)
Net Profit	6,533	5,608	12,814	9,327	9,151

Statement of Financial Position - extract	2016	2015	2014	2013	2012
	K'000	K'000	K'000	K'000	K'000
Assets
Non-Current Assets	62,309	67,836	68,172	35,084	33,541
Current Assets	58,580	50,280	57,763	38,152	41,886
Total Assets	120,889	118,116	125,935	73,236	75,427
Equity
Share Capital	761	761	761	761	761
Retained Earnings	53,668	50,388	50,626	42,651	36,274
Revaluation Reserves	30,016	31,006	32,010	12,024	12,581
Total Equity	84,445	82,155	83,397	55,436	49,616
Liabilities
Deferred Tax liability	15,237	16,031	18,546	6,243	6,780
Current Liabilities	21,207	19,930	23,992	11,557	19,031
Total Liabilities	36,444	35,961	42,538	17,800	25,811
Total Equity and Liabilities	120,889	118,116	125,935	73,236	75,427

Required:

Using MS Excel and/or Ms Word:

Prepare a trend analysis of the statement of comprehensive income and the statement of financial position from 2012 to 2016. The trend analysis should show the trend in absolute figures and in percentage terms (30 marks)

Prepare a trend graph showing trend in non-current assets and current assets over the five year period ( 5 marks)

Prepare a trend graph showing trend in total equity and total liabilities over the five year period (5 marks)

Prepare a common size statement for the statement of comprehensive income using turnover as the common base (8 marks)

Prepare a common size statement for the statement of financial position using total assets as the common base(22 marks) f) Calculate the following ratios over the five year period:

Profit before tax(PBT) %

Taxation as a % of PBT

Net profit % iv. Current ratio

v. Total liabilities to total equity ratio vi. Total liabilities to total assets ratio

(13 marks)

g) Prepare a report commenting on the profitability, liquidity and capital structure of Chongwe Zambia Company Plc over the five year period. (17 marks)

[Total 100 marks