QUESTION 3 (20 marks) The management of Ceramics Pro Limited are in process of restructuring their business. They consider ther comparative financial statements, but they need to see a good overview of the growth and decline of items through the years. The following is an extract of the comparative statement of profit or loss and other comprehensive income of Ceramics Pro Limited for five years: 2019 2018 2017 2016 2020 R000 R 000 R000 R'000 R'000 Revenue 15 23 12 225 13 558 9988 70.58 Distribution costs 1850 1989) (778) 1878) 1519) Earnings before interest and tax (EBIT) 5.333 3765 4155 2314 1415 Additional information: 1. Ceramics Pro Limited is a company that sell and distribute roof tiles to building equipment suppliers and has a few large clients. 2. Ceramics Pro Limited purchased and sold roof tiles with defects in 2016. These sales were lost because the roof tiles had been retumed to them. After that they had to convince their clients that they will do detailed inspections of the roof tiles before they deliver. 3. Tles 4U Limited, a client of Ceramics Pro Limited, was liquidated in July 2010. This was due to poor market conditions as well as fraudulent actions by their management. 6 MAC2602/A02 4. Ceramics Pro Limited is currently under new management. They have been appointed in 2020. REQUIRED: a) Redraft the extract of the comparative statement of profit or loss and other comprehensive income of Ceramics Pro Limited by using the following techniques: Indexed statements [Round your answer to the full percentage.] Common size statements [Round your answer to one decimal place.] (14) b) Use the strategic or non-financial information as provided in the additional information and provide context to the financial analysis in (a) in the form of a discussion. (6) [20] QUESTION 3 (20 marks) The management of Ceramics Pro Limited are in process of restructuring their business. They consider ther comparative financial statements, but they need to see a good overview of the growth and decline of items through the years. The following is an extract of the comparative statement of profit or loss and other comprehensive income of Ceramics Pro Limited for five years: 2019 2018 2017 2016 2020 R000 R 000 R000 R'000 R'000 Revenue 15 23 12 225 13 558 9988 70.58 Distribution costs 1850 1989) (778) 1878) 1519) Earnings before interest and tax (EBIT) 5.333 3765 4155 2314 1415 Additional information: 1. Ceramics Pro Limited is a company that sell and distribute roof tiles to building equipment suppliers and has a few large clients. 2. Ceramics Pro Limited purchased and sold roof tiles with defects in 2016. These sales were lost because the roof tiles had been retumed to them. After that they had to convince their clients that they will do detailed inspections of the roof tiles before they deliver. 3. Tles 4U Limited, a client of Ceramics Pro Limited, was liquidated in July 2010. This was due to poor market conditions as well as fraudulent actions by their management. 6 MAC2602/A02 4. Ceramics Pro Limited is currently under new management. They have been appointed in 2020. REQUIRED: a) Redraft the extract of the comparative statement of profit or loss and other comprehensive income of Ceramics Pro Limited by using the following techniques: Indexed statements [Round your answer to the full percentage.] Common size statements [Round your answer to one decimal place.] (14) b) Use the strategic or non-financial information as provided in the additional information and provide context to the financial analysis in (a) in the form of a discussion. (6) [20]
