Question 2- Ratio analysis \begin{tabular}{|c|c|c|c|} \hline Balance sheet & & & \\ \hline Year & 30-Jun-16 & 30-Jun-17 & 30-Jun-18 \\ \hline Total Equity & 871,828,000 & 934,311,000 & 1,057,866,000 \\ \hline Ordinary Share Capital & 4,341,000 & 4,357,000 & 4,357,000 \\ \hline Share Premlum & 163,617,000 & 175,020,000 & 175,146,000 \\ \hline Non-Distributable Reserves & (379,212,000) & (412,318,000) & (386,811,000) \\ \hline Distributable Reserves & 1,083,082,000 & 1,167,252,000 & 1,265,174,000 \\ \hline Outside Shareholders Interest & - & - & - \\ \hline Preference Shares & 397,500,000 & - & - \\ \hline Deferred Tax & 144,685,000 & 151,171,000 & 175,147,000 \\ \hline Other Non-Current Liabilities & 302,374,000 & 89,517,000 & 777,352,000 \\ \hline Director's \& Shareholders Loans & 37,893,000 & - & - \\ \hline Long Term Interest Bearing & 314,120,000 & 320,000,000 & 494,120,000 \\ \hline Total Capital & 2,068,400,000 & 1,494,999,000 & 2,504,485,000 \\ \hline Fixed Assets & 1,844,140,000 & 1,917,022,000 & 2,285,396,000 \\ \hline Intangible Assets & 45,558,000 & 50,486,000 & 54,678,000 \\ \hline Investments \& Loans & - & 200,000 & 200,000 \\ \hline Other Non-Current Assets & 5,747,000 & 10,785,000 & 12,410,000 \\ \hline Net Current Assets & 172,955,000 & (483,494,000) & 151,801,000 \\ \hline Current Assets & 306,648,000 & 372,367,000 & 333,046,000 \\ \hline Inventory & 7,734,000 & 6,845,000 & 7,298,000 \\ \hline Trade Receivables & 190,216,000 & 249,858,000 & 264,373,000 \\ \hline Cash \& Near Cash & 104,309,000 & 115,664,000 & 53,093,000 \\ \hline Dividends Receivable & - & - & - \\ \hline Tax Receivable & 4,389,000 & - & 8,282,000 \\ \hline Current Liabilities & 133,693,000 & 855,861,000 & 181,245,000 \\ \hline Trade Payables & 130,546,000 & 757,810,000 & 178,915,000 \\ \hline Dividends Payable & 3,147,000 & 2,860,000 & 2,330,000 \\ \hline Tax Payable & - & 7,543,000 & - \\ \hline Short-Term Interest Bearing & - & 87,648,000 & - \\ \hline Net Assets & 2,068,400,000 & 1,494,999,000 & 2,504,485,000 \\ \hline \end{tabular} Use the attached financial statement for City Lodge. 1. Discuss the performance of City Lodge over the years 2016, 2017 and 2018. Assume that shareholders are expecting a minimum Return on Equity of 18% per annum. Calculate the ratios that you think you need to use to make this determination. [10 Marks] 2. Show how the levers that drive ROE are changing from one year to the next between 2016, 2017 and 2018. Comment on what you see. [10 marks] Note on Formulas: Do your calculations using the following formulas: ROE = PAT / Total Equity 100 RONA = EBIT / Net Assets x100 - Use the numbers in the income statement and balance as they appear of the surface. There is no need to make accounting adjustments. - Do not use averages in your calculations