b. THE STATEMENT OF FINANCIAL POSITION OF MATATIZO LTD FOR THE YEAR 2019 IS AS FOLLOWS Fixed Assets Sh. 6000 Intangible 123,000 Tangible 2,079,500 Investments 10,000 2,212,500 Current Assets Stocks 479,000 Debtors 1,774,500 2 L Cash and short-term investments 5000 2,258,500 Current liabilities Trade creditors 956,500 Bank overdraft 504,000 Other current liabilities 152,500 (1,613,000) Net working capital 645500 Total assets 2.858.000 Long-term Loans 124,000 Other long-term liabilities 33.000 Total non-current liabilities 157,000 Share capital (@Sh.3 each) 300,000 Profit and loss account Brought forward 1,896,500 Retained for year 504,500 Shareholder fund 2.701.000 Long-term liabilities & equity 2.858,000 INCOME STATEMENT OF MATATIZO LIMITED FOR THE YEAR TO DECEMBER 31 2019 Sales revenue 1,900,000 Less: Cost of Sales (B80,000) Gross Profit 1,020,000 Less: operating Expense (270.000) PBIT 750,000 Interest Expense (130,000) Profit before tax 620,000 Less: Income Tax Expense (92.000) Profit after tax 528,000 Less: proposed dividends (23,500) Retained earnings 504,500 Assume that the market value of the company's stocks at the year-end was SH. 30 per share and the company generated a negative cash flow in the year amounting to SH.93 Million Required Use the Altman Z-score models to assess the financial strength of the company and comment on your answer (10 Marks) c. The total sales (all credit) of a firm are Sh. 640,000. It has a gross profit margin of 15 per cent and a current ratio of 2.5. The firm's current liabilities are Sh.96,000; inventories Sh. 48,000 and cash Sh. 16,000. Required: i. Determine and interpret the average inventory to be carried by the firm, if an inventory turnover of 5 times is expected (Assume a 360 day year). (3 Marks) II. Determine and interpret the average collection period if the opening balance of debtors is intended to be of 80,000? (Assume a 360 day year). (3 Marks) (Total: 20 Marks) 3