You are required to: 1. Use the information in respect of Laser & Tiger Ltd 2010 and 2009 financial year, to write a report to the MD analysing the results. (NB: calculate the ratios I.R.O working capital and formulas are crucial) 1.1 Report format 1.2 Gross profit percentage 1.3 Net profit percentage 1.4 ROABT 1.5 ROCE 1.6 Days inventory on hand 1.7 Debtors collection period 1.8 Creditors collection period 2. Discuss what each of the above seven ratios tells you about the efficiency and the profitability of Laser & Tiger Ltd in 2010.

Question 1 (34 marks) The new managing director (MD) of Laser & Tiger Ltd has asked you to analyse and give your views on the relative profitability and liquidity. The following summarised financial statements have been prepared for two years. Laser & Tiger Ltd Statement of financial position as at 30 June 2010 N$ 2010 N$ 2009 ASSETS Non-current assets PPE Investments in properties Investments in subsidiaries Loan receivable Goodwill Total non-current assets 150,000.00 5,000,000.00 48,000.00 250,000.00 120,000.00 5,568,000.00 120,000.00 4,500,000.00 54,000.00 300,000.00 100,000.00 5,074,000.00 Current assets Inventory Trade receivables Cash and cash equivalents Total current assets TOTAL ASSETS 76,000.00 42,000.00 1,200,000.00 1,318,000.00 6,886,000.00 35,000.00 11,000.00 1,300,000.00 1,346,000.00 6,420,000.00 EQUTY AND LIABILITIES Equity Stated capital Retained earnings Total equity 3,000,000.00 2,685,000.00 5,685,000.00 3,000,000.00 2.430,000.00 5,430,000.00 Non-current liabilities Loans from shareholders Long-term debt Total non-current liabilities 120,000.00 950,000.00 1,070,000.00 100,000.00 750,000.00 850,000.00 Current liabilities Trade payables Provisions Taxation payables 79,000.00 41,000.00 11,000.00 54,000.00 63,000.00 23,000.00 Page 21 of 27 Question 1 (34 marks) The new managing director (MD) of Laser & Tiger Ltd has asked you to analyse and give your views on the relative profitability and liquidity. The following summarised financial statements have been prepared for two years. Laser & Tiger Ltd Statement of financial position as at 30 June 2010 N$ 2010 N$ 2009 ASSETS Non-current assets PPE Investments in properties Investments in subsidiaries Loan receivable Goodwill Total non-current assets 150,000.00 5,000,000.00 48,000.00 250,000.00 120,000.00 5,568,000.00 120,000.00 4,500,000.00 54,000.00 300,000.00 100,000.00 5,074,000.00 Current assets Inventory Trade receivables Cash and cash equivalents Total current assets TOTAL ASSETS 76,000.00 42,000.00 1,200,000.00 1,318,000.00 6,886,000.00 35,000.00 11,000.00 1,300,000.00 1,346,000.00 6,420,000.00 EQUTY AND LIABILITIES Equity Stated capital Retained earnings Total equity 3,000,000.00 2,685,000.00 5,685,000.00 3,000,000.00 2.430,000.00 5,430,000.00 Non-current liabilities Loans from shareholders Long-term debt Total non-current liabilities 120,000.00 950,000.00 1,070,000.00 100,000.00 750,000.00 850,000.00 Current liabilities Trade payables Provisions Taxation payables 79,000.00 41,000.00 11,000.00 54,000.00 63,000.00 23,000.00 Page 21 of 27 Question 3 (36 Marks) Here are the financial statements of Diamonds Ltd on 30 September 2018. Diamond Ltd Abridged statement of profit or loss and other comprehensive income for the year ended 30 September 2018 NS Gross profit 2,400,000.00 Other operating expenses (1.580,000.00) Operating profit 820,000.00 Operating income Profit on sale of equipment 12,000.00 Profit from operations 832,000.00 Financing activities Investment income - dividends 68,000.00 Interest on mortgage bond (164,000.00) Profit before tax 736,000.00 Income tax (187,040.00) Profit for the year 548,960.00 Other comprehensive income Re-valuation of land buildings Total comprehensive income 1,398,960.00 5 000 000 no par value ordinary shares 2 500 000 8% redeemable preference shares with a par value of N$ 2.25. 4. Issued share capital consists of: 2018 N$ 2017 N$ 1,150,000.00 Stated capital 1,600,000.00 8% Redeemable preference shares 900,000.00 2,500,000.00 1,125,000.00 2,275,000.00 The original issue of ordinary shares was at N$ 1.15 5. Reserves consist of the following: 2017 2018 N$ N$ Share premium 145,000.00 200,000.00 Revaluation reserve 850,000.00 995,000.00 200,000.00 6. It is the company policy to declare dividends at the end of the financial year with the payment being made during the month of October in the following financial year. 7. Immediately after the dividends were declared the company redeemed 100 000 redeemable preference shares at N$ 2.80 each. This was partially financed by the issue of 200 000 ordinary shares at N$ 1.25 each. An additional issue of ordinary shares at N$ 1.25 each. An additional issue of ordinary shares was made during the same price to help finance the purchase of Land and Buildings, which were purchased to expand the operations. 8. The carrying values of PPE were: 2018 N$ 3,000,000.00 2017 N$ 1,800,000.00 Land & Buildings Question 1 (34 marks) The new managing director (MD) of Laser & Tiger Ltd has asked you to analyse and give your views on the relative profitability and liquidity. The following summarised financial statements have been prepared for two years. Laser & Tiger Ltd Statement of financial position as at 30 June 2010 N$ 2010 N$ 2009 ASSETS Non-current assets PPE Investments in properties Investments in subsidiaries Loan receivable Goodwill Total non-current assets 150,000.00 5,000,000.00 48,000.00 250,000.00 120,000.00 5,568,000.00 120,000.00 4,500,000.00 54,000.00 300,000.00 100,000.00 5,074,000.00 Current assets Inventory Trade receivables Cash and cash equivalents Total current assets TOTAL ASSETS 76,000.00 42,000.00 1,200,000.00 1,318,000.00 6,886,000.00 35,000.00 11,000.00 1,300,000.00 1,346,000.00 6,420,000.00 EQUTY AND LIABILITIES Equity Stated capital Retained earnings Total equity 3,000,000.00 2,685,000.00 5,685,000.00 3,000,000.00 2.430,000.00 5,430,000.00 Non-current liabilities Loans from shareholders Long-term debt Total non-current liabilities 120,000.00 950,000.00 1,070,000.00 100,000.00 750,000.00 850,000.00 Current liabilities Trade payables Provisions Taxation payables 79,000.00 41,000.00 11,000.00 54,000.00 63,000.00 23,000.00 Page 21 of 27 Question 1 (34 marks) The new managing director (MD) of Laser & Tiger Ltd has asked you to analyse and give your views on the relative profitability and liquidity. The following summarised financial statements have been prepared for two years. Laser & Tiger Ltd Statement of financial position as at 30 June 2010 N$ 2010 N$ 2009 ASSETS Non-current assets PPE Investments in properties Investments in subsidiaries Loan receivable Goodwill Total non-current assets 150,000.00 5,000,000.00 48,000.00 250,000.00 120,000.00 5,568,000.00 120,000.00 4,500,000.00 54,000.00 300,000.00 100,000.00 5,074,000.00 Current assets Inventory Trade receivables Cash and cash equivalents Total current assets TOTAL ASSETS 76,000.00 42,000.00 1,200,000.00 1,318,000.00 6,886,000.00 35,000.00 11,000.00 1,300,000.00 1,346,000.00 6,420,000.00 EQUTY AND LIABILITIES Equity Stated capital Retained earnings Total equity 3,000,000.00 2,685,000.00 5,685,000.00 3,000,000.00 2.430,000.00 5,430,000.00 Non-current liabilities Loans from shareholders Long-term debt Total non-current liabilities 120,000.00 950,000.00 1,070,000.00 100,000.00 750,000.00 850,000.00 Current liabilities Trade payables Provisions Taxation payables 79,000.00 41,000.00 11,000.00 54,000.00 63,000.00 23,000.00 Page 21 of 27 Question 3 (36 Marks) Here are the financial statements of Diamonds Ltd on 30 September 2018. Diamond Ltd Abridged statement of profit or loss and other comprehensive income for the year ended 30 September 2018 NS Gross profit 2,400,000.00 Other operating expenses (1.580,000.00) Operating profit 820,000.00 Operating income Profit on sale of equipment 12,000.00 Profit from operations 832,000.00 Financing activities Investment income - dividends 68,000.00 Interest on mortgage bond (164,000.00) Profit before tax 736,000.00 Income tax (187,040.00) Profit for the year 548,960.00 Other comprehensive income Re-valuation of land buildings Total comprehensive income 1,398,960.00 5 000 000 no par value ordinary shares 2 500 000 8% redeemable preference shares with a par value of N$ 2.25. 4. Issued share capital consists of: 2018 N$ 2017 N$ 1,150,000.00 Stated capital 1,600,000.00 8% Redeemable preference shares 900,000.00 2,500,000.00 1,125,000.00 2,275,000.00 The original issue of ordinary shares was at N$ 1.15 5. Reserves consist of the following: 2017 2018 N$ N$ Share premium 145,000.00 200,000.00 Revaluation reserve 850,000.00 995,000.00 200,000.00 6. It is the company policy to declare dividends at the end of the financial year with the payment being made during the month of October in the following financial year. 7. Immediately after the dividends were declared the company redeemed 100 000 redeemable preference shares at N$ 2.80 each. This was partially financed by the issue of 200 000 ordinary shares at N$ 1.25 each. An additional issue of ordinary shares at N$ 1.25 each. An additional issue of ordinary shares was made during the same price to help finance the purchase of Land and Buildings, which were purchased to expand the operations. 8. The carrying values of PPE were: 2018 N$ 3,000,000.00 2017 N$ 1,800,000.00 Land & Buildings