QUESTION 4 REQUIRED Use the information provided below to prepare the Cash Flow Statement of Nascar Limited for the year ended 31 December 2021. INFORMATION The following Information was extracted from the records of Nascar Limited for the past two years: STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER: Sales Cost of sales Gross profit Operating expenses Depreciation Other operating expenses Operating profit Interest on mortgage loan Profit before tax (20 MARKS) Company tax Profit after tax 2021 (R) 18 560 000 (12 800 000) 5 760 000 (2 912 000) 300 000 2 612 000 2 848 000 (240 000) 2 608 000 (782 400) 1 825 600 2020 (R) 12 000 000 (7 500 000) 4 500 000 (2 120 000) 260 000 1 860 000 2 380 000 (720 000) 1 660 000 (498 000) 1 162 000 STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER: ASSETS Non-current assets Fixed assets Current assets Inventories (all Trading inventory) Accounts receivable Cash & cash equivalents EQUITY AND LIABILITIES Equity Ordinary share capital Retained income Non-current liabilities Mortgage loan (12 % p.a.) Current liabilities Accounts payable SARS (Company tax) Shareholders for dividends 2021 (R) 24 641 600 24 641 600 3 560 000 1 200 000 400 000 1 960 000 28 201 600 Profit margin (Net profit margin). Acid test ratio Return on equity 24 495 600 21 800 000 2 695 600 2 000 000 2 000 000 1 706 000 850 000 96 000 760 000 28 201 600 2020 (R) 24 440 000 24 440 000 3 360 000 2 500 000 640 000 220 000 27 800 000 Additional information The issue price of all the shares is R10 each. New shares were issued on the first day of the financial 2021 9.84% 1.38:1 7.45% 19 883 000 17 600 000 2 283 000 6 000 000 6 000 000 year. Interim and final dividends for the year ended 31 December 2021 amounted to R1 413 000. Fixed assets were sold at carrying (book) value during the year for R1 440 000. Fixed assets were also purchased. The shares in Nascar Limited are currently selling for R12 each. All purchases and sales of inventories are on credit. The following ratios have been calculated: 1 917 000 1 290 000 67 000 560 000 27 800 000 2020 9.68% 0.45:1 5.84% Profit margin (Net profit margin) Acid test ratio Return on equity QUESTION 5 5.1.1 5.1.2 5.1.3 Return on assets 5.1.4 Debt to assets 5.1.5 Dividend per share 5.1.6 Current ratio 5.1.7 Earnings yield 2021 9.84% 1.38:1 7.45% REQUIRED Use the information provided in Question 4 to answer the following questions: 5.1 Calculate the following ratios for 2021 only. Express the answers to two decimal places. Inventory turnover Creditor payment period 5.2 Comment briefly but meaningfully on the following ratios which have been calculated: 5.2.1 Profit margin (Net profit margin) 5.2.2 Acid test ratio 5.2.3 Return on equity END OF PAPER 2020 9.68% 0.45:1 5.84% 20 MARKS (2 marks) (2 marks) (2 marks) (2 marks) (2 marks) (2 marks) (2 marks) (2 marks) (2 marks) (2 marks)