Gamashie Ltd is considering purchasing an interest in its competitor Bossman Ltd. The Managing Director of Gamashie Ltd has obtained the three most recent statements of profit or loss and statements of financial position of Bossman Ltd as shown below.

Bossman Ltd

Statements of Profit or Loss for years ended 31 December

2016 2017 2018 GH'000 GH'000 GH'000

Revenue 18,000

18,900 (10,340) 8,560 (1,670) (1,503) 5,387 (815) 4,572 (2,000) 2,572

19,845 (11,890) 7,955 (1,405) (1,591) 4,959 (1,050) 3,909 (1,838) 2,071

Cost of sales

Gross profit

Distribution costs Administrative expenses Profit before interest & tax Finance cost

Profit before tax Income tax Profit after tax

(10,440) 7,560 (1,565) (1,409) 4,586 (704) 3,882 (1,380) 2,502

Bossman Ltd

Statements of Financial Position as at 31 December

2016 2017 2018 GH'000 GH'000 GH'000

Assets

Non-current assets

Land and buildings Plant and machinery

Current assets

11,460 8,896 20,356

12,121 9,020 21,141

2,663 2,260 53 4,976 26,117

8,000

7,313 15,313

5,000

388 2,300

1,420 1,696 5,804

26,117

11,081 9,130 20,211

3,995 3,164 55 7,214 27,425

8,000

7,584 15,584

5,000

446 3,400

1,195 1,800 6,841

27,425

Inventory 1,775 Trade receivables 1,440 Cash 50

Equity and liabilities

Equity and reserves Share capital Retained earnings

Non-current liabilities

12% loan stock

Current liabilities

3,265

23,621

8,000

6,434 14,434

5,000

Trade payables

Bank 1,300 Taxation 897 Dividend payable 1,600

390

4,187

23,621

Required:

Prepare a report for the Managing Director of Gamashie Ltd commenting on the financial performance and position of Bossman Ltd and highlighting any areas that require further investigation.