Required:

$2\mathrm{.}1.$ Calculate the equivalent ratios for Empireshire for the year ended $31$ December $2022,$ after excluding the contribution

made by the division that has been sold.

$2\mathrm{.}2.$ Calculate the equivalent ratio for Empireshire for the year ended $31$ December $2023,$ excluding the profit on the sale

the division.

$2\mathrm{.}3.$ Based on the outcomes of the ratio analyses undertaken in questions $2\mathrm{.}1$ and $2\mathrm{.}2,$ as well as the $2022$ ratios provided

in the question, comment on the comparative financial performance and position of Empireshire.

$(10)$QUESTION $2$

$(18$ Marks$)$

The extracts of the most recent financial statements of a JSE$-$listed company anonymised as Empireshire Limited are

provided below:

EMPIRESHIRE LIMITED

STATEMENTS OF PROFIT OR LOSS FOR THE YEAR ENDED $31$ DECEMBER $2023$

EMPIRESHIRE LIMITED

STATEMENTS OF FINANCIAL POSITION AS AT $31$ DECEMBER $2023$

$($i$)$

The following selected ratios for Empireshire have been calculated for the year ended $31$ December $2022($as

reported above$)$:

$($ii$)$

On $1$ January $2023,$ Empireshire sold the net assets $($including goodwill$)$ of a separately operated division of its

business for $R16m$ cash on which it made a profit of $R2m.$ This transaction required shareholder approval and, in

order to secure this, the management of Empireshire offered shareholders a dividend of $80$ cents for each share in

issue out of proceeds of the sale. The trading results of the division which are included in the statement of profit or loss

for the year ended $31$ December $2022$ above are: