ACCOUNTING AND FINANCIAL MANAGEMENT 2025 EXAMINATION ANSWERS
APPENDIX A: ASSESSMENT COVER SHEET
ASSESSMENT COVER SHEET
Surname
First Name/s 0717513144
Student Number 0717513144
Subject Accounting and Financial Management
Assessment Number EXAMINATION PACK 2025
Tutor’s Name Dhiren Maharaj
Date Submitted
Submission () First Submission Resubmission
Postal Address 0717513144
E-Mail
0717513144
Contact Numbers
0717513144
0717513144
Course/Intake Bachelor of Business Administration Honours
Declaration: I hereby declare that the assignment submitted is an original piece of work produced by myself.
Signature: Date:
,ACCOUNTING AND FINANCIAL MANAGEMENT 2025 EXAMINATION ANSWERS
QUESTION 1 (25 Marks)
1.1.1 Decrease in payables (2 marks)
From working capital changes
Working Capital Changes
Item Amount (R)
Decrease in inventory + 500,000
Increase in receivables - 4,500,000
Decrease in payables - 2,000,000
Total Working Capital Changes - 6,000,000
1.1.2 Investment income (2 marks)
Cash Flow from Operating Activities
Item Amount (R)
Cash generated from operations 31,000,000
Interest paid (2,000,000)
Investment income 1,700,000
Dividends paid (8,000,000)
Company tax paid (5,700,000)
Total Cash flows from operating activities 17,000,000
,ACCOUNTING AND FINANCIAL MANAGEMENT 2025 EXAMINATION ANSWERS
1.2 Increase or decrease in non-current liabilities? (3 marks)
The change in non-current liabilities (long-term borrowings) is part of the financing
activities.
Net Cash Flow Reconciliation
Description Amount (R)
Net Cash from Operating Activities 17,000,000
Net Cash from Investing Activities (26,000,000)
Net Cash from Financing Activities 9,300,000
Net Increase in Cash 300,000
Financing activities comprise long-term borrowings and equity movements. The only
item mentioned is "Increase/Decrease in long-term borrowings". Dividends paid are
already included in operating activities. Therefore, the net cash from financing
activities of R9,300,000 is solely from an increase in long-term borrowings. The
company increased its non-current liabilities.
, ACCOUNTING AND FINANCIAL MANAGEMENT 2025 EXAMINATION ANSWERS
1.3 THREE significant changes not revealed by the Statement of Comprehensive
Income (3 marks)
1.4 Comments
1.4.1 Decrease in inventory of R500,000 (3 marks)
The decrease in inventory by R500,000 indicates improved efficiency in stock
management. This suggests the company successfully sold more goods than it
replenished, leading to a positive cash flow impact. This could be the result of effective
inventory control systems or stronger-than-expected sales that reduced stock levels.
1.4.2 Increase in receivables of R4,500,000 (3 marks)
The increase in accounts receivable by R4,500,000 signifies that a larger portion of
sales were made on credit compared to cash collected from customers. This
represents a use of cash and could point to the company extending more liberal credit
terms to drive sales, or it may indicate a slowdown in the collection process from
debtors, which warrants careful monitoring.
1.4.3 Cash flows from operating activities of R17,000,000 (3 marks)
This figure represents the net cash generated from the company's principal business
operations. A strong positive cash flow of R17 million demonstrates that the core
business is fundamentally healthy and generates sufficient cash to support its
operations, fund investments, and meet its financial obligations to investors and the
government.
1.4.4 Non-current assets purchased for R19,000,000 (3 marks)
This substantial expenditure on non-current assets signifies major capital investment.
It reflects a strategic decision for long-term growth, potentially involving the acquisition
of new property, plant, and equipment. This could be for initiatives such as store
expansions, significant renovations, or upgrading operational infrastructure.
APPENDIX A: ASSESSMENT COVER SHEET
ASSESSMENT COVER SHEET
Surname
First Name/s 0717513144
Student Number 0717513144
Subject Accounting and Financial Management
Assessment Number EXAMINATION PACK 2025
Tutor’s Name Dhiren Maharaj
Date Submitted
Submission () First Submission Resubmission
Postal Address 0717513144
0717513144
Contact Numbers
0717513144
0717513144
Course/Intake Bachelor of Business Administration Honours
Declaration: I hereby declare that the assignment submitted is an original piece of work produced by myself.
Signature: Date:
,ACCOUNTING AND FINANCIAL MANAGEMENT 2025 EXAMINATION ANSWERS
QUESTION 1 (25 Marks)
1.1.1 Decrease in payables (2 marks)
From working capital changes
Working Capital Changes
Item Amount (R)
Decrease in inventory + 500,000
Increase in receivables - 4,500,000
Decrease in payables - 2,000,000
Total Working Capital Changes - 6,000,000
1.1.2 Investment income (2 marks)
Cash Flow from Operating Activities
Item Amount (R)
Cash generated from operations 31,000,000
Interest paid (2,000,000)
Investment income 1,700,000
Dividends paid (8,000,000)
Company tax paid (5,700,000)
Total Cash flows from operating activities 17,000,000
,ACCOUNTING AND FINANCIAL MANAGEMENT 2025 EXAMINATION ANSWERS
1.2 Increase or decrease in non-current liabilities? (3 marks)
The change in non-current liabilities (long-term borrowings) is part of the financing
activities.
Net Cash Flow Reconciliation
Description Amount (R)
Net Cash from Operating Activities 17,000,000
Net Cash from Investing Activities (26,000,000)
Net Cash from Financing Activities 9,300,000
Net Increase in Cash 300,000
Financing activities comprise long-term borrowings and equity movements. The only
item mentioned is "Increase/Decrease in long-term borrowings". Dividends paid are
already included in operating activities. Therefore, the net cash from financing
activities of R9,300,000 is solely from an increase in long-term borrowings. The
company increased its non-current liabilities.
, ACCOUNTING AND FINANCIAL MANAGEMENT 2025 EXAMINATION ANSWERS
1.3 THREE significant changes not revealed by the Statement of Comprehensive
Income (3 marks)
1.4 Comments
1.4.1 Decrease in inventory of R500,000 (3 marks)
The decrease in inventory by R500,000 indicates improved efficiency in stock
management. This suggests the company successfully sold more goods than it
replenished, leading to a positive cash flow impact. This could be the result of effective
inventory control systems or stronger-than-expected sales that reduced stock levels.
1.4.2 Increase in receivables of R4,500,000 (3 marks)
The increase in accounts receivable by R4,500,000 signifies that a larger portion of
sales were made on credit compared to cash collected from customers. This
represents a use of cash and could point to the company extending more liberal credit
terms to drive sales, or it may indicate a slowdown in the collection process from
debtors, which warrants careful monitoring.
1.4.3 Cash flows from operating activities of R17,000,000 (3 marks)
This figure represents the net cash generated from the company's principal business
operations. A strong positive cash flow of R17 million demonstrates that the core
business is fundamentally healthy and generates sufficient cash to support its
operations, fund investments, and meet its financial obligations to investors and the
government.
1.4.4 Non-current assets purchased for R19,000,000 (3 marks)
This substantial expenditure on non-current assets signifies major capital investment.
It reflects a strategic decision for long-term growth, potentially involving the acquisition
of new property, plant, and equipment. This could be for initiatives such as store
expansions, significant renovations, or upgrading operational infrastructure.
