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Accounting and Financial Management

CAPRI LIMITED: PERFORMANCE EVALUATION AND PLANNING

For many years Capri Limited has delivered on its quality products promise to consumers, ensuring continued access to an ever-growing range of established and well-loved brands. Through a spirit of innovation, the company continues to deliver new and exciting products in response to the evolving needs of its customers. Despite its success the management has noted areas for improvement. This is evident in the following financial statements for the past two years:

CAPRI LIMITED
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2021
Rand
Cash flows from operating activities	756 000
Profit before interest and tax/Operating profit	900 000
Adjustments to convert to cash from operations	?
Add: Depreciation	252 000
?	?
?	?
Profit before working capital changes	?
Working capital changes	194 400
Decrease in inventory	288 000
Increase in receivables	(396 000)
Increase in payables	302 400
Cash generated from operations	1 346 400
Interest income	72 000
Dividends paid	?
Company tax paid	(388 800)
Cash flows from investing activities	(1 368 000)
Non-current assets purchased	(1 476 000)
Proceeds from sale of vehicles (sold at a profit of R150 000)	540 000
Increase in long-term investments	(612 000)
Disposal of long-term investments (disposed at a loss of R150 000)	180 000
Cash flows from financing activities	720 000
Proceeds from issue of ordinary shares	720 000
Net increase/decrease in cash and cash equivalents	?
Cash and cash equivalents at beginning of year	792 000
Cash and cash equivalents at end of year	?

CAPRI LIMITED
STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2022
Rand
ASSETS
Non-current assets	5 040 000
Property, plant and equipment (cost)	4 980 000
Accumulated depreciation	(1 260 000)
Investments	1 320 000
Current assets	6 120 000
Inventory	2 100 000
Accounts receivable	2 460 000
Bank	1 560 000
Total assets 11 160 000
EQUITY AND LIABILITIES
Equity	7 500 000
Ordinary Share Capital	5 118 000
Retained Income	2 382 000
Non-current liabilities	2 700 000
Loan	2 700 000
Current liabilities	960 000
Accounts payable	576 000
Dividends payable	384 000
Total equity and liabilities 11 160 000

CAPRI LIMITED
STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2022
Rand
Sales	8 400 000
Cost of sales	(5 304 000)
Gross profit	3 096 000
Operating expenses	(1 596 000)
Operating profit	1 500 000
Interest expense	(324 000)
Interest income	120 000
Profit before tax	1 296 000
Company tax	(390 000)
Profit after tax	906 000

NB: The values in brackets () means to be subtracted.