Elite Academic Institute 068 053 513 262 1185
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Educating the world for a better change
,Elite Academic Institute 068 053 513 262 1185
WARNING: PLEASE NOTE THAT PLAGIARISM IS A SERIOUS ACADEMIC
OFFENSE, therefore, the documents provided here including past assignments, tests and
notes are intended SOLELY for educational purposes and as a guide to help students
understand academic concepts and improve their writing skills. These materials should
not be submitted as final work, as doing so may constitute academic dishonesty. Students
are encouraged to use them as reference points, develop their own understanding and
produce original work that reflects their knowledge and critical thinking. Students are also
encouraged to regenerate their own (personalized) solutions paying particular attention
to module contents as prescribed by module facilitators, lecturers and supervisors. If this
document is plagiarized by the users and fails, ELITE ACADEMIC INSTITUTE should not
be rendered accountable since the contents in this document only give learners a kick-
start on what is expected of them from their areas of specialty.
CAUTION: STUDENTS ARE NOT MANDATED TO USE ALL THE INFORMATION IN
THIS DOCUMENT IN WRITING THEIR ASSIGNMENTS
Educating the world for a better change
,Elite Academic Institute 068 053 513 262 1185
Contents
Course/Intake ........................................................................................................ 24
Bachelor of Business Administration Honours ............................................................... 24
Declaration: I hereby declare that the assignment submitted is an original piece of work produced
by myself. ............................................................................................................. 24
QUESTION 1 (25 Marks) ......................................................................................... 26
1.1.1 Decrease in payables (2 marks) ................................................................ 26
1.1.2 Investment income (2 marks) .................................................................... 26
1.2 Increase or decrease in non-current liabilities? (3 marks) ........................... 26
1.3 THREE significant changes not revealed by the Statement of Comprehensive
Income (3 marks) .............................................................................................. 27
1.4 Comments .................................................................................................. 27
1.4.1 Decrease in inventory of R500,000 (3 marks) ............................................. 27
1.4.2 Increase in receivables of R4,500,000 (3 marks) ........................................ 27
1.4.3 Cash flows from operating activities of R17,000,000 (3 marks) .................. 27
1.4.4 Non-current assets purchased for R19,000,000 (3 marks) .......................... 27
1.4.5 Investment of R7,000,000 (3 marks) ........................................................... 28
QUESTION 2 (25 Marks) ......................................................................................... 28
2.4 Acid-Test Ratio / Quick Ratio (4 marks) ......................................................... 29
𝑪𝒖𝒓𝒓𝒆𝒏𝒕 𝑨𝒔𝒔𝒆𝒕𝒔 − 𝑰𝒏𝒗𝒆𝒏𝒕𝒐𝒓𝒚𝑪𝒖𝒓𝒓𝒆𝒏𝒕 𝑳𝒊𝒂𝒃𝒊𝒍𝒊𝒕𝒊𝒆𝒔 ......................................... 29
2.5 Earnings Per Share (EPS) (4 marks) ............................................................... 29
2.6 Retention Ratio (5 marks) ............................................................................. 29
QUESTION 3 (25 Marks) ......................................................................................... 30
3.1 Margin of Safety (as a percentage) (5 marks) ................................................ 31
QUESTION 4 (25 Marks) ......................................................................................... 33
Educating the world for a better change
, Elite Academic Institute 068 053 513 262 1185
4.1 Payback Period (6 marks) ................................................................................ 33
4.2 Accounting Rate of Return (ARR) for Project A (5 marks) ............................... 34
4.3 Net Present Value (NPV) of both projects (8 marks) ...................................... 35
4.4 Internal Rate of Return (IRR) for Project A (6 marks) ...................................... 35
References .............................................................................................................. 37
2.2 Highest Operating Profits (14 marks) ........................................................... 101
2.3 Proposal Recommendation (2 marks) .......................................................... 101
QUESTION 1 (20 Marks) ....................................................................................... 119
1.1 Based on the mark-up used to determine the selling price, management
expected a gross profit of R 292 500 for 2019. What are the possible reasons for
the gross profit being lower than expected? (3 marks) .................................... 119
1.2 Name two specific expenses that could be included as “Selling, general and
administrative expenses”. (2 marks) .................................................................. 120
1.3 Could there have been any movements in the non-current liabilities? Explain.
(2 marks) ............................................................................................................... 120
1.4 Calculate the interest expense for 2019. (2 marks) ..................................... 121
1.5 The interest rate on loans was 12% whilst the return on assets was 18%. How
would shareholders interpret this? (2 marks) ................................................... 121
1.6 Has the earnings per share for the financial year ended 2019 improved over
the previous financial year? How do you think shareholders will feel about this?
(3 marks) ............................................................................................................... 122
Educating the world for a better change
ademic In
Ac sti
te
tu
Eli
te
he
de
W
re a
G ra eM
d u a t e s Ar
Educating the world for a better change
,Elite Academic Institute 068 053 513 262 1185
WARNING: PLEASE NOTE THAT PLAGIARISM IS A SERIOUS ACADEMIC
OFFENSE, therefore, the documents provided here including past assignments, tests and
notes are intended SOLELY for educational purposes and as a guide to help students
understand academic concepts and improve their writing skills. These materials should
not be submitted as final work, as doing so may constitute academic dishonesty. Students
are encouraged to use them as reference points, develop their own understanding and
produce original work that reflects their knowledge and critical thinking. Students are also
encouraged to regenerate their own (personalized) solutions paying particular attention
to module contents as prescribed by module facilitators, lecturers and supervisors. If this
document is plagiarized by the users and fails, ELITE ACADEMIC INSTITUTE should not
be rendered accountable since the contents in this document only give learners a kick-
start on what is expected of them from their areas of specialty.
CAUTION: STUDENTS ARE NOT MANDATED TO USE ALL THE INFORMATION IN
THIS DOCUMENT IN WRITING THEIR ASSIGNMENTS
Educating the world for a better change
,Elite Academic Institute 068 053 513 262 1185
Contents
Course/Intake ........................................................................................................ 24
Bachelor of Business Administration Honours ............................................................... 24
Declaration: I hereby declare that the assignment submitted is an original piece of work produced
by myself. ............................................................................................................. 24
QUESTION 1 (25 Marks) ......................................................................................... 26
1.1.1 Decrease in payables (2 marks) ................................................................ 26
1.1.2 Investment income (2 marks) .................................................................... 26
1.2 Increase or decrease in non-current liabilities? (3 marks) ........................... 26
1.3 THREE significant changes not revealed by the Statement of Comprehensive
Income (3 marks) .............................................................................................. 27
1.4 Comments .................................................................................................. 27
1.4.1 Decrease in inventory of R500,000 (3 marks) ............................................. 27
1.4.2 Increase in receivables of R4,500,000 (3 marks) ........................................ 27
1.4.3 Cash flows from operating activities of R17,000,000 (3 marks) .................. 27
1.4.4 Non-current assets purchased for R19,000,000 (3 marks) .......................... 27
1.4.5 Investment of R7,000,000 (3 marks) ........................................................... 28
QUESTION 2 (25 Marks) ......................................................................................... 28
2.4 Acid-Test Ratio / Quick Ratio (4 marks) ......................................................... 29
𝑪𝒖𝒓𝒓𝒆𝒏𝒕 𝑨𝒔𝒔𝒆𝒕𝒔 − 𝑰𝒏𝒗𝒆𝒏𝒕𝒐𝒓𝒚𝑪𝒖𝒓𝒓𝒆𝒏𝒕 𝑳𝒊𝒂𝒃𝒊𝒍𝒊𝒕𝒊𝒆𝒔 ......................................... 29
2.5 Earnings Per Share (EPS) (4 marks) ............................................................... 29
2.6 Retention Ratio (5 marks) ............................................................................. 29
QUESTION 3 (25 Marks) ......................................................................................... 30
3.1 Margin of Safety (as a percentage) (5 marks) ................................................ 31
QUESTION 4 (25 Marks) ......................................................................................... 33
Educating the world for a better change
, Elite Academic Institute 068 053 513 262 1185
4.1 Payback Period (6 marks) ................................................................................ 33
4.2 Accounting Rate of Return (ARR) for Project A (5 marks) ............................... 34
4.3 Net Present Value (NPV) of both projects (8 marks) ...................................... 35
4.4 Internal Rate of Return (IRR) for Project A (6 marks) ...................................... 35
References .............................................................................................................. 37
2.2 Highest Operating Profits (14 marks) ........................................................... 101
2.3 Proposal Recommendation (2 marks) .......................................................... 101
QUESTION 1 (20 Marks) ....................................................................................... 119
1.1 Based on the mark-up used to determine the selling price, management
expected a gross profit of R 292 500 for 2019. What are the possible reasons for
the gross profit being lower than expected? (3 marks) .................................... 119
1.2 Name two specific expenses that could be included as “Selling, general and
administrative expenses”. (2 marks) .................................................................. 120
1.3 Could there have been any movements in the non-current liabilities? Explain.
(2 marks) ............................................................................................................... 120
1.4 Calculate the interest expense for 2019. (2 marks) ..................................... 121
1.5 The interest rate on loans was 12% whilst the return on assets was 18%. How
would shareholders interpret this? (2 marks) ................................................... 121
1.6 Has the earnings per share for the financial year ended 2019 improved over
the previous financial year? How do you think shareholders will feel about this?
(3 marks) ............................................................................................................... 122
Educating the world for a better change
