File Tools View Project Cost Management Notes QUESTION THREE LZE Projects Statement of Financial Position for 2022 and 2021 financial years are presented below: [25] Their abbreviated Statement of Comprehensive Income for the year ended 2022 is presented below: Revenue (75% on credit) Assets 2022 Non-current Assets 5 000 000 Inventory Receivables 600 000 300 000 Cash 300 000 6 200 000 2021 4 700 000 700 000 320 000 100 000 5 820 000 Equity and Liabilities Share Capital (R2 shares) Share Premium Retained Income 2022 2 400 000 600 000 550 000 2021 2 200 000 200 000 400 000 2 100 000 Long term Debt 2 000 000 Payables 650 000 920 000 6 200 000 5 820 000 2 000 000 Purchases (all purchases on credit) 850 000 Depreciation 80 000 Interest expense 90 000 Tax (30%) 160 000 Net Income after tax 300 000 Dividends 150 000 Retained Income 150 000 2 Required: 1. 2. Additional information: Shares are currently trading at R3.20 per share. Replacement cost of assets is R6 000 000. 3.1 Calculate the current ratio for 2022 and comment. (The ratio for 2021 was 1.22:1) (4) 3.2 Calculate the debtors' collection period for the current year. Note: Debtors terms: 60 days net. The ratio for 2021 was 66 days. (4) 3.3 Calculate the following ratios for 2022: Their abbreviated Statement of Comprehensive Income for the year ended 2022 is 3.3.1 Earnings per share (4) 3.3.2 Dividends per share. Would shareholders be happy with this dividend? Explain. (4) 3.4 Calculate the Market to Book Ratio and explain the relevance of this ratio to decision makers. (4) 3.5 Calculate the Price Earnings ratio for 2022 and explain the significance of this ratio. (5) Screens 1-2 of 3 21C Mostly cloudy = Focus Q Search IA + 140% 6:17 PM 6/4/2023