Read the case study and answer the questions that follow: ORBIT LIMITED: FINANCIAL PERFORMANCE AND FORECASTING The mission of Orbit Limited is to achieve its vision by providing an innovafive product and creative customer experiences, It's talented staff are guided by the values, social conscience and customer-centric mindset espoused by the board of directors. At the core of Orbit Limited is its customers. The company is committed to successful growth by delivering excellent service to its customers to whom it offers quality and value. If is for these reasons that Orbit Limited was able to achieve success in the marketplace. However, the management has identified the need to improve in certain respects. The following are the financial statements for the past two years: Read the case study and answer the questions that follow: ORBIT LIMITED: FINANCIAL PERFORMANCE AND FORECASTING The mission of Orbit Limited is to achieve its vision by providing an innovafive product and creative customer experiences. It's talented staff are guided by the values, social conscience and customer-centric mindset espoused by the board of directors. At the core of Orbit Limited is its customers. The company is committed to successful growth by delivering excellent service to its customers to whom it offers quality and value. It is for these reasons that Orbit Limited was able to achieve success in the marketplace. However, the management has identfied the need to improve in certain respects. The following are the financial statements for the past two years: In addition to the above, the following informabion is available: All sales and purchases of inventory are on credit Inventones on 31 December 2020 amounter to R1 500000 . Credit terms of 5/10 net 90 days are granted by creditors. Credit terms of 60 days are granted to deblors. Dividends declared for the years ended 31 December 2021 and 2022 amounted to R1169280 and R1 422000 respectively The financial manager of Orbit Limiled provided the following forecasts for 2023 : Sales are estimaled at 8000 urits with a selling price of R1800 each. The manufacturing costs include direct materials of R460 per unit, direct labour of R315 per unit, variable overheads of R170 per unit and fixed overheads of R880 000 . Fixed selling and administration costs are estimated at R2000000 and the variable seling costs are estimated to be 75% of sales. The direclors are contemplating diversification in 2024 by entering the passenger transport market. This could be achieved Evrough the purchase of a feet of midi buses that are expected to cost R9 500000 . An additional R $00000 will be spent on irport difies. The cost of operating the buses each year is expected to be R4 100000 and the annual revenues irom transporing the passengers are estimaled at R7000000. The buses are expected to have a total salvage value of R1 000000 and the estimated useful life of the buses is five years. The company's cost of capital is expected to reduce to 15%. Depreciation is calculated using the straight-fine method QUESTION 2 (25 Marks) REQUIRED Calculate the appropriate ratios (expressed to two decimal places) and provide an interpretation of your answers for each of the following over the two-year period: 2.1 The effectiveness of the company regarding the management of its accounts payable. 22 The ability of the company to settle its short-term debts under distress conditions. 2.3 The percentage of the profit that has been retained in the company. 2.4 The profitability of the company from the point of view of the shareholders. 2.5 A measure of the efficiency with which the total assets of company are managed. 26 The effectiveness of the credit administration of the company in respect of its customers who purchase on credit (5 marks) (4 marks) (4 marks) (4 marks) (4 marks) (4 marks) QUESTION 3 (25 Marks) REQUIRED Refer to the forecasts made by the financial manager for 2023 and calculate the following independently. As far as possible, use the contribution margin format of the income statement to present your answers. 3.1. Break-even quantity. 3.2 The sales value required to make an operating profit of R2016 000 , by using the contribution margin ratio. (5 marks) 3.3 The percentage change in the operating profit (expressed to two decinal places), if the selling price and fixed costs increase by 10%. (5 marks) 3.4 The total Contribution Margin and Operating Profithoss if the sales volume is 10% below (5 marks) expectation. 3.5 The selling price per unit (expressed in rands and cents) that will enable the company to (5 marks) break even (5 masks) Read the case study and answer the questions that follow: ORBIT LIMITED: FINANCIAL PERFORMANCE AND FORECASTING The mission of Orbit Limited is to achieve its vision by providing an innovafive product and creative customer experiences. It's talented staff are guided by the values, social conscience and customer-centric mindset espoused by the board of directors. At the core of Orbit Limited is its customers. The company is committed to successful growth by delivening excellent service to its customers to whom it offers quality and value. It is for these reasons that Orbit Limited was able to achieve success in the markelplace. However, the management has identfied the need to improve in certain respects. The following are the financial statements for the past two years: ORBIT LIMITED: FINANCIAL PERFORMANCE AND FORECASTING The mission of Orbit Limited is to achieve its vision by providing an innovative product and creative customer experiences. If's talented staff are guided by the values, social conscience and customer-centric mindset espoused by the board of directors. At the core of Orbit Limited is its customers. The company is committed to successful growth by delivering excellent service to its customers to whom it offers quality and value. It is for these reasons that Orbit Limited was able to achieve success in the markelplace. However, the management has identified the need to improve in certain respects. The following are the financial statements for the past two years: In addition to the above, the following information is available: All sales and purchases of inventory are on credit Inveniones on 31 December 2020 amounted to R1 500000 . Credit terms of 5/10 net 90 days are granted by creditors. Credit terms of 60 days are granted to debtors. Dividends declared for the years ended 31 December 2021 and 2022 amounted to R1 169280 and R1 422000 respectively. The financial manager of Orbit Limited provided the following forecasts for 2023 . Sales are estimated at 8000 units with a seling pnce of R1800 each. The manufactuning costs include direct matenals of R460 per unit, direct labour of R315 per unit, vanible overheads of R170 per unit and fixed overheads of RB80 000. Fixed selling and administration costs are estimated at R2 000000 and the vanable seling costs are estimated to be 7.5% of sales The directors are contemplating diversificaton in 2024 by entering the passenger transport makket. This could be achieved through the purchase of a fleet of midi buses that are expected to cost R9500000. An addibonal R500000 will be spent on import duties. The cost of operating the buses each year is expected to be R4 100000 and the are expected to have a total salvage value of R1 000000 and the estimated useful life of the buses is five years. The company's cost of capital is expected to reduce to 15%. Depreciation is calculated using the straight-line method. (25 Marks) REQUIRED Calculate the appropriate ratios (expressed to two decimal places) and provide an interpretafion of your answers for each of the following over the two-year period: 2.1 The effectiveness of the company regarding the managernent of its accounts payable. 22 The ability of the company to settle its short-term debts under distress conditions. 2.3 The percentage of the profit that has been retained in the company. 24 The profitability of the company from the point of view of the shareholders. 2.5 A measure of the efficiency with which the total assets of company are managed. (5 marks) (4 marks) ( 4 marks) ( 4 marks) 2.6 The effectiveness of the credit administration of the company in respect of its customers (4 marks) who purchase on credit. (4 marks) QUESTION 3 (25 Marks) REQUIRED Refer to the forecasts made by the financial manager for 2023 and calculate the following independently. As far as possible, use the contribution margin format of the income statement to present your answers 3.1. Break-even quantity. 3.2 The sales value required to make an operating profit of R2016000, by using the contribution margin ratio. (5 marks) 3.3 The percentage change in the operating profit (expressed to two decimal places), if the (5 marks) selling price and fixed costs increase by 10% 3.4 The total Contribution Margin and Operating ProfitLoss if the sales volume is 10% below (5 marks) expectation. ( 5 marks) 3.5 The selling price per unit (expressed in rands and cents) that will enable the company to break even. (5 marks) REQUIRED Refer to the planned diversification for 2024 and calculate the following: 4.1 Payback Period (expressed in years, months and days) ( 3 marks) 4.2. Accounting Rate of Return on initial investment (expressed to two decimal places) 4.3 Net Present Value (5 marks) 4.4 Internal Rate of Return using interpolation (expressed to two decimal places). ( 6 marks) 4.5 Internal Rate of Return using interpolation (expressed to two decimal places) if there ( 6 marks) were no import duties and no salvage value. (5 marks) Read the case study and answer the questions that follow: ORBIT LIMITED: FINANCIAL PERFORMANCE AND FORECASTING The mission of Orbit Limited is to achieve its vision by providing an innovafive product and creative customer experiences, It's talented staff are guided by the values, social conscience and customer-centric mindset espoused by the board of directors. At the core of Orbit Limited is its customers. The company is committed to successful growth by delivering excellent service to its customers to whom it offers quality and value. If is for these reasons that Orbit Limited was able to achieve success in the marketplace. However, the management has identified the need to improve in certain respects. The following are the financial statements for the past two years: Read the case study and answer the questions that follow: ORBIT LIMITED: FINANCIAL PERFORMANCE AND FORECASTING The mission of Orbit Limited is to achieve its vision by providing an innovafive product and creative customer experiences. It's talented staff are guided by the values, social conscience and customer-centric mindset espoused by the board of directors. At the core of Orbit Limited is its customers. The company is committed to successful growth by delivering excellent service to its customers to whom it offers quality and value. It is for these reasons that Orbit Limited was able to achieve success in the marketplace. However, the management has identfied the need to improve in certain respects. The following are the financial statements for the past two years: In addition to the above, the following informabion is available: All sales and purchases of inventory are on credit Inventones on 31 December 2020 amounter to R1 500000 . Credit terms of 5/10 net 90 days are granted by creditors. Credit terms of 60 days are granted to deblors. Dividends declared for the years ended 31 December 2021 and 2022 amounted to R1169280 and R1 422000 respectively The financial manager of Orbit Limiled provided the following forecasts for 2023 : Sales are estimaled at 8000 urits with a selling price of R1800 each. The manufacturing costs include direct materials of R460 per unit, direct labour of R315 per unit, variable overheads of R170 per unit and fixed overheads of R880 000 . Fixed selling and administration costs are estimated at R2000000 and the variable seling costs are estimated to be 75% of sales. The direclors are contemplating diversification in 2024 by entering the passenger transport market. This could be achieved Evrough the purchase of a feet of midi buses that are expected to cost R9 500000 . An additional R $00000 will be spent on irport difies. The cost of operating the buses each year is expected to be R4 100000 and the annual revenues irom transporing the passengers are estimaled at R7000000. The buses are expected to have a total salvage value of R1 000000 and the estimated useful life of the buses is five years. The company's cost of capital is expected to reduce to 15%. Depreciation is calculated using the straight-fine method QUESTION 2 (25 Marks) REQUIRED Calculate the appropriate ratios (expressed to two decimal places) and provide an interpretation of your answers for each of the following over the two-year period: 2.1 The effectiveness of the company regarding the management of its accounts payable. 22 The ability of the company to settle its short-term debts under distress conditions. 2.3 The percentage of the profit that has been retained in the company. 2.4 The profitability of the company from the point of view of the shareholders. 2.5 A measure of the efficiency with which the total assets of company are managed. 26 The effectiveness of the credit administration of the company in respect of its customers who purchase on credit (5 marks) (4 marks) (4 marks) (4 marks) (4 marks) (4 marks) QUESTION 3 (25 Marks) REQUIRED Refer to the forecasts made by the financial manager for 2023 and calculate the following independently. As far as possible, use the contribution margin format of the income statement to present your answers. 3.1. Break-even quantity. 3.2 The sales value required to make an operating profit of R2016 000 , by using the contribution margin ratio. (5 marks) 3.3 The percentage change in the operating profit (expressed to two decinal places), if the selling price and fixed costs increase by 10%. (5 marks) 3.4 The total Contribution Margin and Operating Profithoss if the sales volume is 10% below (5 marks) expectation. 3.5 The selling price per unit (expressed in rands and cents) that will enable the company to (5 marks) break even (5 masks) Read the case study and answer the questions that follow: ORBIT LIMITED: FINANCIAL PERFORMANCE AND FORECASTING The mission of Orbit Limited is to achieve its vision by providing an innovafive product and creative customer experiences. It's talented staff are guided by the values, social conscience and customer-centric mindset espoused by the board of directors. At the core of Orbit Limited is its customers. The company is committed to successful growth by delivening excellent service to its customers to whom it offers quality and value. It is for these reasons that Orbit Limited was able to achieve success in the markelplace. However, the management has identfied the need to improve in certain respects. The following are the financial statements for the past two years: ORBIT LIMITED: FINANCIAL PERFORMANCE AND FORECASTING The mission of Orbit Limited is to achieve its vision by providing an innovative product and creative customer experiences. If's talented staff are guided by the values, social conscience and customer-centric mindset espoused by the board of directors. At the core of Orbit Limited is its customers. The company is committed to successful growth by delivering excellent service to its customers to whom it offers quality and value. It is for these reasons that Orbit Limited was able to achieve success in the markelplace. However, the management has identified the need to improve in certain respects. The following are the financial statements for the past two years: In addition to the above, the following information is available: All sales and purchases of inventory are on credit Inveniones on 31 December 2020 amounted to R1 500000 . Credit terms of 5/10 net 90 days are granted by creditors. Credit terms of 60 days are granted to debtors. Dividends declared for the years ended 31 December 2021 and 2022 amounted to R1 169280 and R1 422000 respectively. The financial manager of Orbit Limited provided the following forecasts for 2023 . Sales are estimated at 8000 units with a seling pnce of R1800 each. The manufactuning costs include direct matenals of R460 per unit, direct labour of R315 per unit, vanible overheads of R170 per unit and fixed overheads of RB80 000. Fixed selling and administration costs are estimated at R2 000000 and the vanable seling costs are estimated to be 7.5% of sales The directors are contemplating diversificaton in 2024 by entering the passenger transport makket. This could be achieved through the purchase of a fleet of midi buses that are expected to cost R9500000. An addibonal R500000 will be spent on import duties. The cost of operating the buses each year is expected to be R4 100000 and the are expected to have a total salvage value of R1 000000 and the estimated useful life of the buses is five years. The company's cost of capital is expected to reduce to 15%. Depreciation is calculated using the straight-line method. (25 Marks) REQUIRED Calculate the appropriate ratios (expressed to two decimal places) and provide an interpretafion of your answers for each of the following over the two-year period: 2.1 The effectiveness of the company regarding the managernent of its accounts payable. 22 The ability of the company to settle its short-term debts under distress conditions. 2.3 The percentage of the profit that has been retained in the company. 24 The profitability of the company from the point of view of the shareholders. 2.5 A measure of the efficiency with which the total assets of company are managed. (5 marks) (4 marks) ( 4 marks) ( 4 marks) 2.6 The effectiveness of the credit administration of the company in respect of its customers (4 marks) who purchase on credit. (4 marks) QUESTION 3 (25 Marks) REQUIRED Refer to the forecasts made by the financial manager for 2023 and calculate the following independently. As far as possible, use the contribution margin format of the income statement to present your answers 3.1. Break-even quantity. 3.2 The sales value required to make an operating profit of R2016000, by using the contribution margin ratio. (5 marks) 3.3 The percentage change in the operating profit (expressed to two decimal places), if the (5 marks) selling price and fixed costs increase by 10% 3.4 The total Contribution Margin and Operating ProfitLoss if the sales volume is 10% below (5 marks) expectation. ( 5 marks) 3.5 The selling price per unit (expressed in rands and cents) that will enable the company to break even. (5 marks) REQUIRED Refer to the planned diversification for 2024 and calculate the following: 4.1 Payback Period (expressed in years, months and days) ( 3 marks) 4.2. Accounting Rate of Return on initial investment (expressed to two decimal places) 4.3 Net Present Value (5 marks) 4.4 Internal Rate of Return using interpolation (expressed to two decimal places). ( 6 marks) 4.5 Internal Rate of Return using interpolation (expressed to two decimal places) if there ( 6 marks) were no import duties and no salvage value