Founded in 1970 by Bennie Joseph and Karel Snyman, Joseph & Snyman is a fully autonomous Namibian Company. They have more than 40 years of experience in the buying, selling and management of property. Joseph & Snyman acts as property managers for a vast variety of landowners ranging from private investors to financial institutions both from within the borders of Namibia as well as from neighbouring countries. Through this association with investors from all walks of life, Joseph & Snyman has acquired experience in and knowledge of different approaches to property investments and can therefore advise potential investors best on the acquisition and management of fixed property. Joseph & Snyman manages a large number of commercial and industrial properties with a gross lettable area in excess of +300 000 m? and a value of over N$4.5 billion. With an acute knowledge of the local property market and hands on approach to managing assets, Joseph & Snymans management team is well positioned to remain at the forefront of the property management field in Namibia. With added services like valuations, appraising, letting of properties and consulting, Joseph & Snyman must be the first choice for any clients one stop property needs. The following information relating to Joseph & Snyman has been made available to you: Statement of comprehensive income (extract) for the year ended 30 June 2018 N$ Revenue 1 200 000 Cost of sales (920 000) Gross profit 280 000 Operating expenses (120 000) Operating profit 160 000 Interest expense (20 000) Profit before tax 140 000 Taxation (54 200) Profit after tax 85 800 Dividends paid 40 000

Statement of financial position as at 2018 2017 30 June ASSETS Non-current assets Property plant and equipment 540000 570000 Current assets Inventory 164000 100000 Accounts receivable 68200 84400 Cash and cash equivalents 44400 48000 Total assets 816600 802400 EQUITY AND LIABILITIES Ordinary share capital (100 000 shares) 220 400 146 200 Retained earnings 366 600 300 000 Equity 114 000 36 000 Non-current liabilities Long-term debt 816 600 240 000 Current liabilities 100 400 340 400 Accounts payable 320 000 98 000 Accrued expenses 44 000 802 400

The following are the industry average ratios: Net profit margin 8%, Current ratio 2.5 Acid test ratio 1.0 Return on assets 12.2% Return on equity 28.5% Earnings per share NS0.63 REQUIRED: MARKS a) Compare the profitability of Joseph & Snyman to that of the average of the (9) industry for the year ended 30 June 2018. b) Calculate the measures of short-term solvency (liquidity) and the debt ratio. (9) Briefly comment on the position of Joseph & Snyman in 2018 in relation to the budget

c) Calculate and comment on the Joseph & Snymans cash conversion cycle and suggest two ways this cycle could be improved. (12)

TOTAL MARKS (30)