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Question 1

1. Given the following statement of Comprehensive Income of XYZ Company Calculate and briefly discuss the financial position of the company basedon each financial ration.

XYZ Company Statement of Comprehensive Income for the year ended 31 December:
	2018	2017
Sales (all credit)	1 672 400	1 574 800
Cost of sales (all credit)	(878 700)	(812 600)
Gross profit	793 700	762 200
Operating expenses:	(487 900)	(466 600)
Selling, general and administrative Other expenses	396 300 91 600	371 200 95 400
Operating profit	305 800	295 600
Other income:	2 700	3 300
Interest income		2 700			3 300
Profit before interest	308 500	298 900
Interest expense	(11 100)	(10 900)
Profit before tax	297 400	288 000
Company tax	(74 350)	(72 000)
Profit after tax	223 050	216 000

Calculate the following ratios for 2018 and 2017 financial year and comment on your answer.

Profitability Ratios

1.1. Profit Margin Ratio (5)

1.2. Gross Margin Ratio (5)

1.3. Return on Asset (5)

1.4. Return on Equity (5)

QUESTION2

2. Given the following statement of Financial Position XYZ Company Calculate and briefly discuss the financial position of the company based on each financial ration.

XYZ Company Statement of Financial Position as at 31 December:
Assets	2018	2017
Non-current assets	814 300	783 000
Current assets:	637 900	606 600
Inventories Accounts receivable Cash and cash equivalents	231 200 289 100 117 600	203 000 277 800 125 800
Total assets	1 452 200	1 389 600
Equity and liabilities
Equity	653 100	628 900
Ordinary share capital (600 000 shares)	600 000	600 000
Retained earnings	53 100	28 900
Non-current liabilities	323 700	378 800
Current liabilities	475 400	381 900
Accounts payable	108 100	100 800
Other current liabilities	367 300	281 100
Total Equity and liabilities	1 452 200	1 389 600

Calculate the following Ratios for 2018 and 2017 financial year and interpret the results.

Liquidity Ratios

2.1. Current Ratio (5)

2.2. Acid test Ration (Quick Ratio) (5)

2.3. Inventory Turnover Ratio (5)

QUESTION3

3 Calculatethefollowing Ratios for2018and2017financialyearandinterpretthe results.

Dividends for 2018 were R105 000 and R100 000 for 2017

Security MarketRatio

3.1.EarningsperShare (5)

3.2DividendsperShare (5)

Question 4

4.1 A five-year project has a projected net cash flow of R15,000, R25,000, R30,000, R20,000, and R15,000 in the next five years. It will cost R50,000 to implement the project. If the required rate of return is 20 percent, conduct a discounted cash flow calculation to determine the NPV. (7)

4.2 Lerato intends to establish a saving account for his daughters' university education when they enter high school. He will make payments of R5 000 each into his account at the beginning of each year and will earn compound interest of 8% per annum on his investment. You are required to calculate the future value of the annuity due after five years when his daughter will have finished high school. (7)

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