QUESTION 2 You are a consultant for Glory Ltd, a quoted company operating in the manufacturing sector. Following area Statement of Profit or Loss and Statement of Financial Position with comparatives for the year ended 31" December 2016 Statement of Profit or Loss for the year ended 31" December, 2018 2018 2017 GHS GHS Sales revenue 3,095,376 1,909.051 Cost of sales 2.402.609 1.441.950 Gross profit 692.967 467,101 Interest receivable 744 2.782 Administration expenses 331466 222.872 Operating profit 360 245 247,011 Interest 18,115 21.909 Profit before tation 342.130 225.102 Income tax expense 74.200 31.272 Profit for the year 267930 193.8.10 Statement of Financial Position as at 31 December 2018 2018 GHS GHS Non-currents Property, plant and equipment 802.180 656071 Current assets Inventory 64.422 86 550 Trade receivables 905.679 307.712 Prepayment and accrued income 97.022 45.729 Cash at bank and in hand 1.327 6163 1,068.450 100 154 Total assets 1,870.630 1,664,425 Equity and abilities Equity Ordinary shares 258,178 258.178 Income surplus 651,721 410591 909.899 Non-current liabilities 10% loan stock 100.000 100.000 Current liabilities Trade payables 627,018 545,340 Accruals and deferred income 81.279 280,464 Corporate taxes 108.000 37.200 Other taxes 860,731 895656 Total cquity and liabilities 1,870,630 1,664 425 Required: Calculate the following ratio Profitability ratios - Return on Capital Employed, Return on Equity, Gross profit margin and Net profit margin ii. Long term solvency and stability - Debt/Asset ratio, Gearing ratio and Interest cover Short-term solvency and liquidity - Current ratio and Acid test ratio Efficiency (tumover ratios) - Account receivable collection period, Account payable payment period, Inventory turnover times) iv. b. Prepare a report addressed to the Chief Executive Officer, assessing the relative performance and financial position of Glory Lad for the year ended 31" December, 2018 QUESTION 2 You are a consultant for Glory Ltd, a quoted company operating in the manufacturing sector. Following area Statement of Profit or Loss and Statement of Financial Position with comparatives for the year ended 31" December 2016 Statement of Profit or Loss for the year ended 31" December, 2018 2018 2017 GHS GHS Sales revenue 3,095,376 1,909.051 Cost of sales 2.402.609 1.441.950 Gross profit 692.967 467,101 Interest receivable 744 2.782 Administration expenses 331466 222.872 Operating profit 360 245 247,011 Interest 18,115 21.909 Profit before tation 342.130 225.102 Income tax expense 74.200 31.272 Profit for the year 267930 193.8.10 Statement of Financial Position as at 31 December 2018 2018 GHS GHS Non-currents Property, plant and equipment 802.180 656071 Current assets Inventory 64.422 86 550 Trade receivables 905.679 307.712 Prepayment and accrued income 97.022 45.729 Cash at bank and in hand 1.327 6163 1,068.450 100 154 Total assets 1,870.630 1,664,425 Equity and abilities Equity Ordinary shares 258,178 258.178 Income surplus 651,721 410591 909.899 Non-current liabilities 10% loan stock 100.000 100.000 Current liabilities Trade payables 627,018 545,340 Accruals and deferred income 81.279 280,464 Corporate taxes 108.000 37.200 Other taxes 860,731 895656 Total cquity and liabilities 1,870,630 1,664 425 Required: Calculate the following ratio Profitability ratios - Return on Capital Employed, Return on Equity, Gross profit margin and Net profit margin ii. Long term solvency and stability - Debt/Asset ratio, Gearing ratio and Interest cover Short-term solvency and liquidity - Current ratio and Acid test ratio Efficiency (tumover ratios) - Account receivable collection period, Account payable payment period, Inventory turnover times) iv. b. Prepare a report addressed to the Chief Executive Officer, assessing the relative performance and financial position of Glory Lad for the year ended 31" December, 2018
