QUESTION LICOMPULSORY You Tons Collins, the manager of Agrippa ple, an Irish food production cond on the cost of Ireland It is currently listed on the Dublis Stock change and has achieved significant growth in market share and probability over the last seves ran. Apri ple's core market is in the production and supply of seved both by its own feet of trawlers as well as independent bous along the west coast However, a recent Bopas Union report into the decline of fish stocks in the Atlantic Oce is expected to win a recommendation to reduce the amount of fish that can be caught European Atlantie w for the seven years. This will have serious implications for Agripple, as it will mean that the company could be able to supply all the markets that it has built up in the Europes content in recent years. Apripople will now postpone indefinitely a planted investment in production capacity in its factors in Galaxy and Karyllecase of competitive pressure in the Furopean market, the cony will have limited scope to increase the price of its product and as a result, the future probability of Agrippa ples how at risk Agripple is examining the possibility of diversitying into new was of business and it has identified the companies in the Irish food sector that specialise in the production of vegam version of frozen ready-made Irish tradisional dimers. This market has shown significant growth intemattomally and with its established distribution network to food markets throughout Europe. Agrippa ple sees potential synergies that could be exploited The two companies. Rhodes and Finch Lad are based in Dublin and Agrippa ple has obtained the following diran financial statements for the two companies. Stalements of Profit or loss for the year ended 31 March 2020 Finch Rhode E' 3,000 B.150 (72) Revenue Cost of sales Gross profit Operating expenses Firunce costs Profit before tax Income tax expense Profit for the year Note: wides paid during the 6,150 ( 750 (150) (180) 420 (120) 315 (45) 270 79 210 Cow we pupy Page 2 of 2 Statement of Financial Position as at 31 March 2010 Rheda op 'n 2010 1.030 Inn 600 730 4.440 600 Property evaluation serve Retained earning 20 20 240 1.050 840 900 9000 10 notes Deferred tax Government grants nil 1.410 1.90 160 850 90 Trade pables Goverment gran Least obligion (node (ii) Taubon 150 350 1,230 1220 1.710 Total equity and liabilities Notes: Both companies have the same financial year-end. They both operate from similar premises located in the Dublin area. Initial enquiries made by Agrippa plc suggest that both companies would be receptive to takeover. Additional details of the two companies' property, plant and equipment areas follows Question continued Rhodla Finch E 1,320 1,500 Freehold factory cost 1.600.000) Owned plant (cost 2.400,000) (cost 3,000,000 Right-to-use plant 1.500 2.829 The right-to-use plant for Finch Lid was originally capitalised at 2.120,000. There were no disposals of non-current assets during the year by either company. For the purpose of calculating the Return on Capital Employed (ROCE) and gearing. all lease obligations are treated as long-term borrowings For ROH, capital employed is taken as shareholders funds plus long-term borrowings Gearing is calculated as: Latem omwings X 100 Long- horrowings - Equity The effective interest rate on the lease is (ii) The following to have been calculated for Rhodald: 14.80% 1.2 times 12.50 10.Son Relum On Capital Employed (ROCE) Nel total se less current liabilities turnover Gross Bolt Margin Operating Profit Margin Current ratio Inventory holding period Trade receivables collection period Trade payables pomeni period Geering Dinsidend cover 70 days 108 days 35.30% 36 times Crowne REQUIRED Coachment to the given above for Rhodod (26 marts Depart which is the directors of Agrippa ple on their acquisition decision met of the financial performance and position of both Rhoda Lid Find for the year ended 31 March 2000 10 Marks Oleme ties for analysis of a company's performance and pieder information that may be useful to the murement of 20 Mark) Total: 80 Marks QUESTION LICOMPULSORY You Tons Collins, the manager of Agrippa ple, an Irish food production cond on the cost of Ireland It is currently listed on the Dublis Stock change and has achieved significant growth in market share and probability over the last seves ran. Apri ple's core market is in the production and supply of seved both by its own feet of trawlers as well as independent bous along the west coast However, a recent Bopas Union report into the decline of fish stocks in the Atlantic Oce is expected to win a recommendation to reduce the amount of fish that can be caught European Atlantie w for the seven years. This will have serious implications for Agripple, as it will mean that the company could be able to supply all the markets that it has built up in the Europes content in recent years. Apripople will now postpone indefinitely a planted investment in production capacity in its factors in Galaxy and Karyllecase of competitive pressure in the Furopean market, the cony will have limited scope to increase the price of its product and as a result, the future probability of Agrippa ples how at risk Agripple is examining the possibility of diversitying into new was of business and it has identified the companies in the Irish food sector that specialise in the production of vegam version of frozen ready-made Irish tradisional dimers. This market has shown significant growth intemattomally and with its established distribution network to food markets throughout Europe. Agrippa ple sees potential synergies that could be exploited The two companies. Rhodes and Finch Lad are based in Dublin and Agrippa ple has obtained the following diran financial statements for the two companies. Stalements of Profit or loss for the year ended 31 March 2020 Finch Rhode E' 3,000 B.150 (72) Revenue Cost of sales Gross profit Operating expenses Firunce costs Profit before tax Income tax expense Profit for the year Note: wides paid during the 6,150 ( 750 (150) (180) 420 (120) 315 (45) 270 79 210 Cow we pupy Page 2 of 2 Statement of Financial Position as at 31 March 2010 Rheda op 'n 2010 1.030 Inn 600 730 4.440 600 Property evaluation serve Retained earning 20 20 240 1.050 840 900 9000 10 notes Deferred tax Government grants nil 1.410 1.90 160 850 90 Trade pables Goverment gran Least obligion (node (ii) Taubon 150 350 1,230 1220 1.710 Total equity and liabilities Notes: Both companies have the same financial year-end. They both operate from similar premises located in the Dublin area. Initial enquiries made by Agrippa plc suggest that both companies would be receptive to takeover. Additional details of the two companies' property, plant and equipment areas follows Question continued Rhodla Finch E 1,320 1,500 Freehold factory cost 1.600.000) Owned plant (cost 2.400,000) (cost 3,000,000 Right-to-use plant 1.500 2.829 The right-to-use plant for Finch Lid was originally capitalised at 2.120,000. There were no disposals of non-current assets during the year by either company. For the purpose of calculating the Return on Capital Employed (ROCE) and gearing. all lease obligations are treated as long-term borrowings For ROH, capital employed is taken as shareholders funds plus long-term borrowings Gearing is calculated as: Latem omwings X 100 Long- horrowings - Equity The effective interest rate on the lease is (ii) The following to have been calculated for Rhodald: 14.80% 1.2 times 12.50 10.Son Relum On Capital Employed (ROCE) Nel total se less current liabilities turnover Gross Bolt Margin Operating Profit Margin Current ratio Inventory holding period Trade receivables collection period Trade payables pomeni period Geering Dinsidend cover 70 days 108 days 35.30% 36 times Crowne REQUIRED Coachment to the given above for Rhodod (26 marts Depart which is the directors of Agrippa ple on their acquisition decision met of the financial performance and position of both Rhoda Lid Find for the year ended 31 March 2000 10 Marks Oleme ties for analysis of a company's performance and pieder information that may be useful to the murement of 20 Mark) Total: 80 Marks