Financial Management

Question 1 [30] Novo (Pty) Ltd specialises in electronics and is a supplier to various industries. Company management is considering an expansion programme to increase its capacity and market share. As a first step, company management wants to consider the company's performance and profitability. For this purpose, the following information is made available: Statements of Comprehensive Income for Novo (Pty) Ltd for the years 2021 and 2022 Additional information: - The company did not increase the prices of its products from 2021 to 2022. - The company replaced some of its suppliers of product components at the end of 2021. Required Note: Round all calculations off to the nearest whole number 1.1 Use the information provided and prepare a set of common-size statements of comprehensive income. Indicate next to each item in the common-size statements, whether the company's performance "Improved", remained "Unchanged" or "Worsened" when comparing the 2022 to the 2021 results. (17) 1.2 Explain to the company's management the causes for any changes in its gross profit, operating profit and net profit margins based on the information in the common size statements. (13)