Statement of Financial Position

Figures in Sh. 2018 2017 2016 Cash 308,000 356,250 368,000 Accounts receivables 885,000 625,000 492,000 Inventory 1,115,000 825,000 530,000 Prepaid expenses 97,000 93,750 40,000 PPE 2,775,000 2,550,000 2,295,000 Total assets 5,180,000 4,450,000 3,725,000 Accounts payable 1,289,000 752,500 492,500 Loan 975,000 1,025,000 825,000 Share capital (Sh. 10 par) 1,625,000 1,625,000 1,625,000 Retained earnings 1,291,000 1,047,500 782,500 Total liability and equity 5,180,000 4,450,000 3,725,000

Income Statement 2018 2017 Sales 6,725,000 5,300,000 Cost of sales 4,102,250 3,445,000 Gross profit 2,622,750 1,855,000 Other operating expenses 2,085,500 1,339,800 Operating income 537,250 515,200 Interest expense 111,000 123,000 Income before tax 426,250 392,200 Income tax 85,250 78,450 Net income 341,000 313,750

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Required: a) Evaluate the Firms efficiency, profitability and solvency for the years 2018 and 2017 (12 marks) b) What additional information would you require to conclude your evaluation (8 marks)