UESTION 4 Ida Brown opened a business by the name of 'Craft for Africa' in Green market Square Cape Town. She bought all her wood frames, wire for toys, African beads and paint aterials from a local supplier. She runs a big business which caters for the tourism dustry and she also exports goods to overseas countries. afer to the financial statements below and answer the questions, OTE: Make use of figures before tax and show ALL the calculations. ICOME STATEMENT OF CRAFTS FOR AFRICA FOR THE YEAR ENDED NOVEMBER 2014 Income statement B 1439 200 R_748 222 R 691 000 B63.000 Salos Cost of sales Gross profit Less: Selling expenses Overheads Administrative expenses Net income before tax Less tax Net income before tax R 609 000 R 24 000 R 58 000 R 17 200 R.40.800 R374 000 BALANCE SHEET OF CRAFTS FOR AFRICA AS AT 30 NOVEMBER 2014 Employed capital Owner's equity Capital R 333 200 Net profit R 40 800 Long term liabilities B 200 000 574 000 Employed of capital Fixed assets Land and building Machinery R 514 000 R 460 000 R 54 000 R80 000 Netgument assets Current assets Stock Debtors Cash LOSS current liabilities Creditors R 110 000 R10 000 R 80 000 R20 000 R 50 000 R 50 000 574 ODO How well is the business compensating the owner for the risk that she took? HINT: Return on Investment. (6) 4.2 Was it worthwhile to take the risk? Give TWO reasons. (6) 4.3 Does the business have enough cash to pay its debts? HINT: ACID test ratio, average collection period (50% of sales are on credit) (12) 4.4 Work out the short-term liquidity position of the business. (6) HINT: Current ratio. 4.5 Identify FIVE departments that have to be considered for the business to be successful (5) (5 x 1) 4.6 Identify FIVE aspects of operations management control and explain how each would contribute to Linda's business. (5x) (15) [50]