NORBROOK RETAILERS LIMITED

Background

Norbrook Retailers Limited $($NRL$)$ is a clothing store located in Portmore. The company was originally a family$-$owned company that was incorporated six $(6)$ years ago. It grew rapidly over this period and became a Public Limited company two years ago. NRL listed on the Jamaica Stock Exchange on January $2,2014.$

Below are the financials of the company for the years $2017$ and $2018$

$20172018$ $ $ Sales Revenue $370,666,720410,760,560$ Cost of Sales $(340,450,450)(370,560,200)$ Gross Profit $30,216,27040,200,360$ Other Revenues $7,140,0156,514,001$ Total Gross Revenue $37,356,28546,714,361$ Administrative Expenses $17,000,04019,546,002$ Selling and Distribution $12,067,00014,356,700$ Finance Cost $1,571,0501,789,060$ Net Profit before taxation $6,718,19511,022,599$ Taxation $2,015,4593,306,780$ Net Profit after taxation $4,702,7367,715,819$

Norbrook Retailers Limited Statement of Comprehensive Income for the years ended $31$ December :

Notes to the Financial Statements:

$1.$ Average stock held for $2017$ was $$26,000,000$ and $2018$: $$23,500,0002.$ Dividends of $10\%$ and $12\%$ on the ordinary shares was declared and paid in $2017$ and $2018$ respectively $3.$ The market prices per share at each year end was as follows:$2017,$ $$4\mathrm{.}50$ and $2018,$ $$5\mathrm{.}20$

$20172018$ Non Current Assets $ $ Property,Plant and Equipment $15,600,70022,200,700$ Current Assets Inventories $24,500,60028,600,790$ Trade Receivables $7,890,0009,340,060$ Cash and Cash equivalents $2,450,0001,678,00034,840,60039,618,85050,441,30061,819,550$ EQUITY & LIABILITIES Equity Ordinary Shares of $$2$ each $4,000,0004,000,000$ Retained Earnings $14,569,45018,900,70518,569,45022,900,705$ Non Current Liabilities $\%5$ Debentures $20,651,15018,628,890$ Bank Loans $4,000,00011,000,00024,651,15029,628,890$

Current Liabilities Trade Payables $4,250,7006,710,945$ Acrued Expenses $670,000789,560$ Taxation $2,300,0001,789,4507,220,7009,289,95550,441,30061,819,550$

Norbrook Retailers Limited Statement of Financial Position as at $31$ December :

The Plan

The Company is considering opening a new store in Mandeville. The directors of the company have contracted you do an assessment of the financial performance of the company over the two $(2)$ year period $2017$ to $2018.$

REQUIRED:

A$)$ Calculate appropriate ratios $(2$ each$)$ for the company in the areas of Liquidity, Efficiency, Solvency, Profitability, and Market Prospects $(10$ marks$)$ B$)$ Write a report to the Board of Directors on the performance of the company over the two years, highlighting areas of concern. $(20$ marks$)$ C$)$ Would you recommend the opening of a new store in Mandeville? Discuss $(10$ marks$)$