Question
Kenya Kwanza ltd wants to determine its liquidity position in 5 years from closure of business in year 2022. The financial position as at December
Kenya Kwanza ltd wants to determine its liquidity position in 5 years from closure of business in year 2022. The financial position as at December 2022 was:
Balance sheet as at 31 December, 2022
Fixed assets: | Ksh. 000 | Ksh. 000 |
Freehold premises | 1,680,000 |
|
Leasehold premises | 1,200,000 |
|
Plant and equipment | 1,120,000 |
|
Motor vehicles | 600,000 | 4,600,000 |
Current assets: |
|
|
Stocks | 2,120,000 |
|
Debtors | 880,000 |
|
Bank balance | 240,000 | 3,240,000 |
|
| 7,840,000 |
Capital & liabilities: |
|
|
Creditors | 1,440,000 |
|
Accrued expenses | 1,120,000 |
|
Ordinary share capital | 4,000,000 |
|
Reserves | 380,000 |
|
15% loan | 900,000 | 7,840,000 |
7,840,000 |
Additional information:
The loan will mature before the end of the 5 year period and will be duly settled.
Sales for year 2022 amounted to ksh 16,000m and are expected to grow by 8% per year in each of the five years from 2022 to 2027.
Dividend payout ratio of 40% is to be maintained.
Profit after tax is to be maintained at 14% of sales
Except for the ordinary share capital and reserves, all the remaining balance sheet items are to maintain their current (2022) percentage of sales
Required:
Determine the External Financing or Surplus funds for investments as at December 2027.
Kenya Kwanza ltd wants to determine its liquidity position in 5 years from closure of business in year 2022. The financial position as at December 2022 was:
Balance sheet as at 31 December, 2022
Fixed assets: | Ksh. 000 | Ksh. 000 |
Freehold premises | 1,680,000 |
|
Leasehold premises | 1,200,000 |
|
Plant and equipment | 1,120,000 |
|
Motor vehicles | 600,000 | 4,600,000 |
Current assets: |
|
|
Stocks | 2,120,000 |
|
Debtors | 880,000 |
|
Bank balance | 240,000 | 3,240,000 |
|
| 7,840,000 |
Capital & liabilities: |
|
|
Creditors | 1,440,000 |
|
Accrued expenses | 1,120,000 |
|
Ordinary share capital | 4,000,000 |
|
Reserves | 380,000 |
|
15% loan | 900,000 | 7,840,000 |
7,840,000 |
Additional information:
The loan will mature before the end of the 5 year period and will be duly settled.
Sales for year 2022 amounted to ksh 16,000m and are expected to grow by 8% per year in each of the five years from 2022 to 2027.
Dividend payout ratio of 40% is to be maintained.
Profit after tax is to be maintained at 14% of sales
Except for the ordinary share capital and reserves, all the remaining balance sheet items are to maintain their current (2022) percentage of sales
Required:
Determine the External Financing or Surplus funds for investments as at December 2027.
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