TASK 1 (25) Study the attached set of financial statements for Molo Enterprise and answer the...

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TASK 1 (25) Study the attached set of financial statements for Molo Enterprise and answer the following questions. 1. Use your knowledge of ratio analyses and comment in detail on the financial situation. 2. Calculate the amount of tax payable by Molo Enterprise both NFI and FP (use the tax table). (5) 3. Is the concept of advantageous financing applicable? Motivate your answer by using the available Information. 4. Make recommendations on the following. Proof your answers with the relevant information. (a) Must Molo Enterprise borrow money for new developments? 5. Calculate the debt repayment ability. (a) If you were the bank how much money will you lend them. (5) (5) (5) (5) 6. The repayment ability of a farming enterprise is determined by which aspects? BALANCE SHEET MOLO ENTERPRISE AS ON THE 28TH FEBRUARY 2018/2019 LIABILITIES ASSETS Current liabilities 28/02/18 28/02/19 Current assets 28/02/18 28/02/19 Bank overdraft 95 000 30 000 Debtors 80 000 70 000 Provision for income 80 000 60 000 Stock on hand 400 000 430 000 tax Harvest on lands 350 000 150 000 Marketable livestock 190 000 80 000 Production items 60 000 70 000 TASK 1 (25) Study the attached set of financial statements for Molo Enterprise and answer the following questions. 1. Use your knowledge of ratio analyses and comment in detail on the financial situation. 2. Calculate the amount of tax payable by Molo Enterprise both NFI and FP (use the tax table). (5) 3. Is the concept of advantageous financing applicable? Motivate your answer by using the available Information. 4. Make recommendations on the following. Proof your answers with the relevant information. (a) Must Molo Enterprise borrow money for new developments? 5. Calculate the debt repayment ability. (a) If you were the bank how much money will you lend them. (5) (5) (5) (5) 6. The repayment ability of a farming enterprise is determined by which aspects? BALANCE SHEET MOLO ENTERPRISE AS ON THE 28TH FEBRUARY 2018/2019 LIABILITIES ASSETS Current liabilities 28/02/18 28/02/19 Current assets 28/02/18 28/02/19 Bank overdraft 95 000 30 000 Debtors 80 000 70 000 Provision for income 80 000 60 000 Stock on hand 400 000 430 000 tax Harvest on lands 350 000 150 000 Marketable livestock 190 000 80 000 Production items 60 000 70 000