Practice question. It is now March 2015. In 2014, the management of Victoria Ple, a company that manufactures new car tyres, bought the company from the Government of Uganda in the on going privatization process. The new management is considering listing the company on the Uganda securities exchange. The following information is available. Victoria Ple Profit and Loss account for the year ended 3 1" December 2014 Shs'000 Turn over Cost of Sales Profit before interest and taxation Interest Profit before taxation Taxation 36,500 (31.600) 4,900 (1.300) 3,600 (500) 3,100 (300) 2.800 Profit after tax Dividends Retained profits Victoria Plc Statement of financial position as at 31 December 2014 Shs'000 Shs"000 Assets Non current assets at cost less accumulated depreciation) Land and Buildings Plant and machinery 3,600 9.900 13,500 Current assets Inventory Receivables 4,400 4.700 1.000 Cash at bank 10.100 23.600 Total Assets Equity and Liabilities Ordinary shares (shs 1 shares) Reserves 1,800 9.700 11,500 Non current liabilities Long term debt (12% debenture 2018) Current liabilities Trade creditors 3.100 7,000 Bank Overdraft 2.000 9.000 Total equity and liabilities 23.600 Victoria Ple operates in an industry whose average performance ratios are as follows: 24% Industry sector ratios Return before tax on long term capital employed Return after tax on equity Operating profit as a percentage of sales 16% 11% 1.6:1 1.0:1 24% Current ratio Quick (acid test) ratio Total debt: equity Dividends cover Interest cover Price/earnings ratio 4 4.5 10 Required: a (a) Evaluate the financial position and performance of Victoria Plc with that of its industrial sector. (b) Discuss the possible reasons why the management of Victoria Plc is considering a stock exchange listing. (C) Explain how you think Victoria Plc should restructure its statement of financial position before listing on Uganda securities Exchange. (d) Discuss changes in financial policy which the company would be advised to adopt once it has been listed on the stock exchange