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SECTION B [ 6 0 MARKS ] ANSWER ANY THREE QUESTIONS IN THIS SECTION. QUESTION 3 ( 2 0 Marks ) 3 . 1 .
SECTION B MARKS ANSWER ANY THREE QUESTIONS IN THIS SECTION. QUESTION Marks Use the information provided below to answer the following question. Marks INFORMATION Fogram Limited FL has reported operating profits of R million. This was after charging R million for the development and launch costs of a new product that is expected to generate profits for years. Taxation is paid at the rate of of the operating profit. FL has a riskadjusted weighted average cost of capital of per annum and is paying interest at per annum on a substantial longterm loan. FLs noncurrent asset value is R million, and the net current assets have a value of R million. The replacement cost of the noncurrent assets is estimated to be R million. Required Calculate the FLs Economic Value Added EVA for the period. Using the information provided below, answer the following questions. Marks INFORMATION The excerpts of financial statements provided below relate to Bettencourt Enterprises Limited BEL for the year ended December BETTENCOURT ENTERPRISES LIMITED STATEMENT OF PROFIT OR LOSS FOR THE YEAR ENDED DECEMBER R R Revenue Cost of sales Gross profit Operating costs Finance costs Profit before tax Corporate tax Profit for the year BETTENCOURT ENTERPRISES LIMITED STATEMENT OF FINANCIAL POSITION AS AT DECEMBER R R Assets Noncurrent assets Property Owned plant Leased plant Current assets Total asset Equity and Liabilities Equity Shareholders equity shares of R each Property revaluation surplus Retained earnings Noncurrent liabilities loan notes Finance lease obligations Current liabilities Finance lease obligations Other current liabilities Total equity and Liabilities Calculate the return on shareholders equity ROE for the and financial years, and comment on the outcome of the calculation round off answers to two decimal places marks Using the DuPont model, analyse and comment on the impact of Bettencourts operational efficiency, asset utilization and financial leverage on the return on shareholders equity for the year ended December round off each to four decimal places It is important that you indicate whether the business has become more efficient andor riskier during the financial year.
SECTION B MARKS
ANSWER ANY THREE QUESTIONS IN THIS SECTION.
QUESTION Marks
Use the information provided below to answer the following question. Marks
INFORMATION
Fogram Limited FL has reported operating profits of R million. This was after charging R million for
the development and launch costs of a new product that is expected to generate profits for years.
Taxation is paid at the rate of of the operating profit.
FL has a riskadjusted weighted average cost of capital of per annum and is paying interest at
per annum on a substantial longterm loan. FLs noncurrent asset value is R million, and the net current
assets have a value of R million. The replacement cost of the noncurrent assets is estimated to be R
million.
Required
Calculate the FLs Economic Value Added EVA for the period.
Using the information provided below, answer the following questions. Marks
INFORMATION
The excerpts of financial statements provided below relate to Bettencourt Enterprises Limited BEL for
the year ended December
BETTENCOURT ENTERPRISES LIMITED
STATEMENT OF PROFIT OR LOSS FOR THE YEAR ENDED DECEMBER
R R
Revenue
Cost of sales
Gross profit
Operating costs
Finance costs
Profit before tax
Corporate tax
Profit for the year
BETTENCOURT ENTERPRISES LIMITED
STATEMENT OF FINANCIAL POSITION AS AT DECEMBER
R R
Assets
Noncurrent assets
Property
Owned plant
Leased plant
Current assets
Total asset
Equity and Liabilities
Equity
Shareholders equity shares of R each
Property revaluation surplus
Retained earnings
Noncurrent liabilities
loan notes
Finance lease obligations
Current liabilities
Finance lease obligations
Other current liabilities
Total equity and Liabilities
Calculate the return on shareholders equity ROE for the and financial years, and comment
on the outcome of the calculation round off answers to two decimal places
marks
Using the DuPont model, analyse and comment on the impact of Bettencourts operational efficiency,
asset utilization and financial leverage on the return on shareholders equity for the year ended December
round off each to four decimal places It is important that you indicate whether the business has
become more efficient andor riskier during the financial year.
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