Question

NA2SAM Ltd has been operating over the past 20 years. Below are extracts of the financial statements for some relevant years.

NA2SAM Company Ltd.

Income Statement for the year ended December 31

2020 2019

GH'000 GH'000

Sales 384,000 255,000

Cost of Sales (198,000) (125,000)

Gross Profit 186,000 130,000

Dividend 100 192

Less Expenses:

Interest 9,800 6,000

Discount allowed 200 400

Bad Debt 60 150

Wages & Salaries 124,000 119,000

134,160 125,742

Profit Before Tax 51,840 4,258

Tax Expense 18,000 3,000

Profit After Tax 33,840 1,258

2020 2019 2018

GH'000 GH'000 GH'000

Cash 55,200 63,800 79,500

Accounts Receivable 92,060 95,960 86,582

Dividend receivable 60 80 50

Inventory 107,300 112,400 135,500

Investment 10,000 8,000 6, 000

Plant and Equipment 149,000 104,800 96,400

Accumulated Depn. (43,000) (40,000) (32,000)

350,620 329,040 360,032

Accounts Payable 41,000 56,000 45,500

Accrued Wages & Salaries 26,200 5,500 2,500

Bank Interest in Arrears 1,500 2,500 6,200

Corporate Tax Payable 18,000 5,000 9,000

Bank Loan 88,000 115,000 158,600

Paid-Up Capital 100,000 80,000 70,000

Retained Earnings 75,900 65,000 68,200

350,620 329,040 360,032

Additional Information:

v. Ninety percent of total sales of NA2SAM constitutes credit businesses.

vi. Eighty percent of the purchases are on credit.

vii. Five percent of the cost of sales of represents the salaries of factory staff.

viii. Ninety-five percent of the accounts payable and receivables relates to trading.

ix. The company pays dividend to shareholders every year.

You are required to:

c) Re-state the financial statement of NA2SAM Company Ltd for the relevant years, showing the distribution of NA2SAM' economic value added.

d) Based on the above (a), evaluate the performance of NA2SAM Ltd over the years in the context of sustainability.