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FIN2601 Assignment 1 (COMPLETE ANSWERS) Semester 1 2025 (185354) - DUE 17 April 2025; 100% TRUSTED Complete, trusted solutions and explanations. $2.50
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FIN2601 Assignment 1 (COMPLETE ANSWERS) Semester 1 2025 (185354) - DUE 17 April 2025; 100% TRUSTED Complete, trusted solutions and explanations.

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  • Principles of Managerial Finance

FIN2601 Assignment 1 (COMPLETE ANSWERS) Semester 1 2025 (185354) - DUE 17 April 2025; 100% TRUSTED Complete, trusted solutions and explanations.

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  • February 12, 2025
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,FIN2601 Assignment 1 (COMPLETE ANSWERS) Semester 1 2025 (185354) -
DUE 17 April 2025; 100% TRUSTED Complete, trusted solutions and
explanations

QUESTION 1 [18 MARKS] Read the information provided and then answer the
questions that follow. Indicate all the steps in your calculations – it is NOT enough
to provide only a final answer. Jungle Build Projects is a relatively young civil
engineering company based in Rustenburg, North West. A month ago, Sherman
Alexander Hemsley was appointed as the financial manager of the company. He
received the company's yearly financial statistics and was requested to prepare a
report on the success of the business. The report must be submitted to
management. Extract from the statement of comprehensive income for 31
December 2024 2023 2024 Sales R4 000 000 R6 000 000 FIN2601/101/1/2025 5
Cost of goods sold R2 800 000 R4 600 000 Gross profit R1 200 000 R1 400 000
Administrative expenses R520 000 R600 000 Earnings before interest and tax
(EBIT) R680 000 R800 000 Extract from the statement of financial position as of
31 December 2024 2023 2024 Trade and other receivables R440 000 R820 000
Inventories R460 500 R380 000 Cash and cash equivalents R299 500 R300 000
Current assets R1 200 000 R1 500 000 Total assets R5 500 000 R7 000 000 Total
liabilities R2 900 000 R5 000 000 Take the following into consideration: a) The
below table of ratios provided is applicable for the year 2023 and 2024 b) Assume
a 365-day year for the calculations. c) Apply year end-based figures for inventory.
Use the information above to answer the following questions: 1.1 Use the financial
statement above to calculate the following ratios for 2023 and 2024: (16 marks)



𝟏. 𝟏 𝑹𝒂𝒕𝒊𝒐𝒔 𝒕𝒐 𝑪𝒂𝒍𝒄𝒖𝒍𝒂𝒕𝒆 𝒇𝒐𝒓 𝟐𝟎𝟐𝟑 𝒂𝒏𝒅 𝟐𝟎𝟐𝟒:

𝑇ℎ𝑒 𝑓𝑖𝑛𝑎𝑛𝑐𝑖𝑎𝑙 𝑟𝑎𝑡𝑖𝑜𝑠 𝑡𝑜 𝑐𝑎𝑙𝑐𝑢𝑙𝑎𝑡𝑒 𝑎𝑟𝑒:

1. 𝑮𝒓𝒐𝒔𝒔 𝑷𝒓𝒐𝒇𝒊𝒕 𝑴𝒂𝒓𝒈𝒊𝒏
2. 𝑺𝒐𝒍𝒗𝒆𝒏𝒄𝒚 (𝑫𝒆𝒃𝒕 𝒕𝒐 𝑬𝒒𝒖𝒊𝒕𝒚 𝑹𝒂𝒕𝒊𝒐)
3. 𝑨𝒗𝒆𝒓𝒂𝒈𝒆 𝑪𝒐𝒍𝒍𝒆𝒄𝒕𝒊𝒐𝒏 𝑷𝒆𝒓𝒊𝒐𝒅 (𝑫𝒂𝒚𝒔 𝑺𝒂𝒍𝒆𝒔 𝑶𝒖𝒕𝒔𝒕𝒂𝒏𝒅𝒊𝒏𝒈)
4. 𝑻𝒐𝒕𝒂𝒍 𝑨𝒔𝒔𝒆𝒕 𝑻𝒖𝒓𝒏𝒐𝒗𝒆𝒓
5. 𝑫𝒆𝒃𝒕 𝑹𝒂𝒕𝒊𝒐

, 𝟏. 𝟏. 𝟏 𝑮𝒓𝒐𝒔𝒔 𝑷𝒓𝒐𝒇𝒊𝒕 𝑴𝒂𝒓𝒈𝒊𝒏 𝐺𝑟𝑜𝑠𝑠 𝑃𝑟𝑜𝑓𝑖𝑡 𝑀𝑎𝑟𝑔𝑖𝑛
= (𝐺𝑟𝑜𝑠𝑠 𝑃𝑟𝑜𝑓𝑖𝑡𝑆𝑎𝑙𝑒𝑠) × 100\𝑡𝑒𝑥𝑡{𝐺𝑟𝑜𝑠𝑠 𝑃𝑟𝑜𝑓𝑖𝑡 𝑀𝑎𝑟𝑔𝑖𝑛}
= \𝑙𝑒𝑓𝑡(\𝑓𝑟𝑎𝑐{\𝑡𝑒𝑥𝑡{𝐺𝑟𝑜𝑠𝑠 𝑃𝑟𝑜𝑓𝑖𝑡}}{\𝑡𝑒𝑥𝑡{𝑆𝑎𝑙𝑒𝑠}}\𝑟𝑖𝑔ℎ𝑡)
\𝑡𝑖𝑚𝑒𝑠 100𝐺𝑟𝑜𝑠𝑠 𝑃𝑟𝑜𝑓𝑖𝑡 𝑀𝑎𝑟𝑔𝑖𝑛 = (𝑆𝑎𝑙𝑒𝑠𝐺𝑟𝑜𝑠𝑠 𝑃𝑟𝑜𝑓𝑖𝑡) × 100

𝐹𝑜𝑟 𝟐𝟎𝟐𝟑:

𝐺𝑟𝑜𝑠𝑠 𝑃𝑟𝑜𝑓𝑖𝑡 𝑀𝑎𝑟𝑔𝑖𝑛 = (1,200,0004,000,000) × 100
= 30%\𝑡𝑒𝑥𝑡{𝐺𝑟𝑜𝑠𝑠 𝑃𝑟𝑜𝑓𝑖𝑡 𝑀𝑎𝑟𝑔𝑖𝑛}
= \𝑙𝑒𝑓𝑡(\𝑓𝑟𝑎𝑐{1,200,000}{4,000,000}\𝑟𝑖𝑔ℎ𝑡) \𝑡𝑖𝑚𝑒𝑠 100
= 30\%𝐺𝑟𝑜𝑠𝑠 𝑃𝑟𝑜𝑓𝑖𝑡 𝑀𝑎𝑟𝑔𝑖𝑛 = (4,000,0001,200,000) × 100
= 30%

𝐹𝑜𝑟 𝟐𝟎𝟐𝟒:

𝐺𝑟𝑜𝑠𝑠 𝑃𝑟𝑜𝑓𝑖𝑡 𝑀𝑎𝑟𝑔𝑖𝑛 = (1,400,0006,000,000) × 100
= 23.33%\𝑡𝑒𝑥𝑡{𝐺𝑟𝑜𝑠𝑠 𝑃𝑟𝑜𝑓𝑖𝑡 𝑀𝑎𝑟𝑔𝑖𝑛}
= \𝑙𝑒𝑓𝑡(\𝑓𝑟𝑎𝑐{1,400,000}{6,000,000}\𝑟𝑖𝑔ℎ𝑡) \𝑡𝑖𝑚𝑒𝑠 100
= 23.33\%𝐺𝑟𝑜𝑠𝑠 𝑃𝑟𝑜𝑓𝑖𝑡 𝑀𝑎𝑟𝑔𝑖𝑛 = (6,000,0001,400,000) × 100
= 23.33%


𝟏. 𝟏. 𝟐 𝑺𝒐𝒍𝒗𝒆𝒏𝒄𝒚 (𝑫𝒆𝒃𝒕 𝒕𝒐 𝑬𝒒𝒖𝒊𝒕𝒚 𝑹𝒂𝒕𝒊𝒐)

.

𝐹𝑖𝑟𝑠𝑡, 𝑤𝑒 𝑛𝑒𝑒𝑑 𝑡𝑜 𝑐𝑎𝑙𝑐𝑢𝑙𝑎𝑡𝑒 𝒆𝒒𝒖𝒊𝒕𝒚 (𝑤ℎ𝑖𝑐ℎ 𝑖𝑠 𝑇𝑜𝑡𝑎𝑙 𝐴𝑠𝑠𝑒𝑡𝑠 𝑚𝑖𝑛𝑢𝑠 𝑇𝑜𝑡𝑎𝑙 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠).

𝐸𝑞𝑢𝑖𝑡𝑦 = 𝑇𝑜𝑡𝑎𝑙 𝐴𝑠𝑠𝑒𝑡𝑠 − 𝑇𝑜𝑡𝑎𝑙 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠\𝑡𝑒𝑥𝑡{𝐸𝑞𝑢𝑖𝑡𝑦}
= \𝑡𝑒𝑥𝑡{𝑇𝑜𝑡𝑎𝑙 𝐴𝑠𝑠𝑒𝑡𝑠} − \𝑡𝑒𝑥𝑡{𝑇𝑜𝑡𝑎𝑙 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠}𝐸𝑞𝑢𝑖𝑡𝑦
= 𝑇𝑜𝑡𝑎𝑙 𝐴𝑠𝑠𝑒𝑡𝑠 − 𝑇𝑜𝑡𝑎𝑙 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠

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