Current Inventory Trade receives Bank 9400 2,000 2.400 7.802 3.600 1.700 600 7.300 5,000 14.400 14,800 Question 3 Amekom Ple is public company that would like to require (100%) suitable private company. It has obtained the following dah financial statements for two companies, Bordiem Plc and Apim Ple. They operate in the same industry and their managements have indicated that they would be receptive to a takeover Statements of Profit or Lou for the year ended 31st December, 2020 Bordiem P Apim PL GHE000 GH: 0i Reverse 12.000 20.500 Cost of sales (10,500) (18,000) Grow profit 1.500 2,500 Operating expenses (240) (500) Finance costs - loan (210) (100) - overdrant mil (10) nil (220) Profit before the 1,050 1,400 Income tax expense (150) (400) Totalanes Equity and liabilities Equity shares of GHe each Property revaluation reserve Retained earninp 2,000 900 2.600 2,000 nil 300 5,500 2,800 3,200 Non current liabilities Finance rate obligation (note (1) 74 loan not 1016 loan not Deferred TAN Government 3,000 nil 600 1,200 3.000 100 4,800 1.000 6.300 700 1,200 2,100 Profit for the year 900 Note: didend paid during the you 250 Statements of financial position as at 31st December, 2020 Art Non contact Prebold tictory (note (0) 4400 Owned plant note (10) Le plait note (10) 5.000 nil Current abilities Bank overdratt Trade alles Government Finance lease obligation (note (1) Text 400 3.800 nil SCO 200 2,200 5.300 4,100 5,200 Total equity and liabilities 14,400 14,800 Interest cover 6 times Dividend cover 3-6 times You are required to Calculate for Apen Ple the ratios equivalent to all those given for Bordiem Ple above Assess the relative performance and financial position of Bordiom Ple and Apim Ple for the year ended 30 September 2020 to inform the direction of Amekom Ple in their aequi. sition decision Explain the limitations of ratio analysis and any further information that may be useful to the director of Amekom Pk when making an acquisition decinion. Notes Both companies operate from similar premises. Additional details of the two companies' plantare: Bordiem Ple Apim Plc GH4000 GH"000 Owned plant com 8,000 10,000 Leased plant - original fair value nil 7,500 There were no disposal of plant during the year by either company The interest rate implicit within ABC Ple's finance lenses is 7.3% per annum. For the purpose of calculating ROCE and gearing, all finance lease obligations are treated as long-term interest-bearing borrowing: ...The following ratios have been calculated for Bordiem Ple and can be taken to be correct Return on year end capital employed (ROCE) (capital employed taken as shareholders' funds plus long term interest bearing borowings-see note (1) above) Pre tax return on equity (ROE) 19.1% Net asset (total assets les current liabilities) tumover 1-2 times Gross profit margin 1234 Operating profit margin 105% Current ratio 1.21 Closing mentory holding period 70 days Trade recerables collection period 73 days Trade payables payment period in cout of wales) 108 days Gearing (see note () above) Current Inventory Trade receives Bank 9400 2,000 2.400 7.802 3.600 1.700 600 7.300 5,000 14.400 14,800 Question 3 Amekom Ple is public company that would like to require (100%) suitable private company. It has obtained the following dah financial statements for two companies, Bordiem Plc and Apim Ple. They operate in the same industry and their managements have indicated that they would be receptive to a takeover Statements of Profit or Lou for the year ended 31st December, 2020 Bordiem P Apim PL GHE000 GH: 0i Reverse 12.000 20.500 Cost of sales (10,500) (18,000) Grow profit 1.500 2,500 Operating expenses (240) (500) Finance costs - loan (210) (100) - overdrant mil (10) nil (220) Profit before the 1,050 1,400 Income tax expense (150) (400) Totalanes Equity and liabilities Equity shares of GHe each Property revaluation reserve Retained earninp 2,000 900 2.600 2,000 nil 300 5,500 2,800 3,200 Non current liabilities Finance rate obligation (note (1) 74 loan not 1016 loan not Deferred TAN Government 3,000 nil 600 1,200 3.000 100 4,800 1.000 6.300 700 1,200 2,100 Profit for the year 900 Note: didend paid during the you 250 Statements of financial position as at 31st December, 2020 Art Non contact Prebold tictory (note (0) 4400 Owned plant note (10) Le plait note (10) 5.000 nil Current abilities Bank overdratt Trade alles Government Finance lease obligation (note (1) Text 400 3.800 nil SCO 200 2,200 5.300 4,100 5,200 Total equity and liabilities 14,400 14,800 Interest cover 6 times Dividend cover 3-6 times You are required to Calculate for Apen Ple the ratios equivalent to all those given for Bordiem Ple above Assess the relative performance and financial position of Bordiom Ple and Apim Ple for the year ended 30 September 2020 to inform the direction of Amekom Ple in their aequi. sition decision Explain the limitations of ratio analysis and any further information that may be useful to the director of Amekom Pk when making an acquisition decinion. Notes Both companies operate from similar premises. Additional details of the two companies' plantare: Bordiem Ple Apim Plc GH4000 GH"000 Owned plant com 8,000 10,000 Leased plant - original fair value nil 7,500 There were no disposal of plant during the year by either company The interest rate implicit within ABC Ple's finance lenses is 7.3% per annum. For the purpose of calculating ROCE and gearing, all finance lease obligations are treated as long-term interest-bearing borrowing: ...The following ratios have been calculated for Bordiem Ple and can be taken to be correct Return on year end capital employed (ROCE) (capital employed taken as shareholders' funds plus long term interest bearing borowings-see note (1) above) Pre tax return on equity (ROE) 19.1% Net asset (total assets les current liabilities) tumover 1-2 times Gross profit margin 1234 Operating profit margin 105% Current ratio 1.21 Closing mentory holding period 70 days Trade recerables collection period 73 days Trade payables payment period in cout of wales) 108 days Gearing (see note () above)