Question 4 You are the Chief Finance Officer (CFO) of an electronics company. The statement of financial performance for the last three (3) years of your company are as follows: 2018 2019 2020 $'000 $'000 $'000 8402981e 913 554 645e 590 286e 3362 323e 12 12 Sales revenue Cost of Salese Gross Profit Less operating expensese Interest expense Profit before corporation taxe Corporation taxation Profit after taxation 6e 94 45 49 15 107 52e 55- 19- 85 452 40- The statement of financial position for the last three (3) years of your company are as follows: 2018 $'000 2019 2020 $'00 $'000 3 36 40 48 206el 216 ttt 176e Non-current assets Intangible assets Non-current assets at carrying amounts Current assetse Inventoriese Accounts Receivable Cash at Bank t 2372 105e 52e 303e294e 141e 160 58 52 t. Total Assets 606 748 770 Equity and Liabilities Equity Issued share capitale Retained Earningse 100 299 100 100 330 346 Non-current liabilities Long term loans 74 138e1382 Current Liabilities Accounts Payablese Other creditors 75- 53 80- 75e 105e111e Total Equity and Liabilities 606 748770 Page 7 of 9 Assume all sales are on credit.- Required (a) ze= Calculate the following ratios for the 3 years of the electronic company: Gross profit margin Net profit margine Non-current Assets turnovere (iv) Current ratio (v) Receivable collection in days (Use year-end debtors) (vi) Inventory turnover in days (Use year-end inventory) (vii) Accounts Payments in days. (Use year-end figures). Assume the cost of sales is equivalent to purchases. (viii) Interest covere (b) Evaluate the company's performance for the last 3 years, from the ratios calculated in part (a). (c) Calculate the operating cash cycle of the electronics company for the year ended 31 December 2020. (32 +11 + 4 =47 marks) Question 4 You are the Chief Finance Officer (CFO) of an electronics company. The statement of financial performance for the last three (3) years of your company are as follows: 2018 2019 2020 $'000 $'000 $'000 8402981e 913 554 645e 590 286e 3362 323e 12 12 Sales revenue Cost of Salese Gross Profit Less operating expensese Interest expense Profit before corporation taxe Corporation taxation Profit after taxation 6e 94 45 49 15 107 52e 55- 19- 85 452 40- The statement of financial position for the last three (3) years of your company are as follows: 2018 $'000 2019 2020 $'00 $'000 3 36 40 48 206el 216 ttt 176e Non-current assets Intangible assets Non-current assets at carrying amounts Current assetse Inventoriese Accounts Receivable Cash at Bank t 2372 105e 52e 303e294e 141e 160 58 52 t. Total Assets 606 748 770 Equity and Liabilities Equity Issued share capitale Retained Earningse 100 299 100 100 330 346 Non-current liabilities Long term loans 74 138e1382 Current Liabilities Accounts Payablese Other creditors 75- 53 80- 75e 105e111e Total Equity and Liabilities 606 748770 Page 7 of 9 Assume all sales are on credit.- Required (a) ze= Calculate the following ratios for the 3 years of the electronic company: Gross profit margin Net profit margine Non-current Assets turnovere (iv) Current ratio (v) Receivable collection in days (Use year-end debtors) (vi) Inventory turnover in days (Use year-end inventory) (vii) Accounts Payments in days. (Use year-end figures). Assume the cost of sales is equivalent to purchases. (viii) Interest covere (b) Evaluate the company's performance for the last 3 years, from the ratios calculated in part (a). (c) Calculate the operating cash cycle of the electronics company for the year ended 31 December 2020. (32 +11 + 4 =47 marks)
