EXCELCENTRE LEARNING INSTITUTE 0846244729
PU E
SHI
NG Y L E NC
OU TO THE GATE OF EXC EL
Education is the most powerful weapon which you can use to change the world
,EXCELCENTRE LEARNING INSTITUTE 0846244729
WARNING: PLEASE NOTE THAT PLAGIARISM IS A SERIOUS ACADEMIC
OFFENSE, therefore students must use this document ONLY as a guideline. Hence
students have regenerated their own (personalized) solutions paying particular
attention to module contents as prescribed by module facilitators, lecturers and
supervisors. This document’s purpose is to compact all sources of information that
might be relevant to students’ assignments, hence additional knowledge on the
provided information is not restricted by the authors. However, submitting this
document as one’s final work is considered unethical, and students should be
penalized. If this document is plagiarized by the users and fails, EXCELCENTRE
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 EVERY DETAIL IN
THIS DOCUMENT IN WRITING THEIR ASSIGNMEN
Education is the most powerful weapon which you can use to change the world
, EXCELCENTRE LEARNING INSTITUTE 0846244729
Table of Contents
............................................................................................................................................. 1
QUESTION 1 (25 Marks) .......................................................................................................... 6
1.1.1 Decrease in payables ................................................................................... 6
1.1.2 Investment income ....................................................................................... 6
1.2 Increase or decrease in non-current liabilities ................................................... 7
1.3 Significant changes to the financial position evident in this Statement of Cash
Flows and not in Statement of Comprehensive Income ........................................... 7
1.4 Comment on the following ............................................................................... 8
1.4.1 Decrease in inventory of R500 000 ................................................................. 8
1.4.2 Increase in receivables of R4 500 000 ............................................................ 8
1.4.3 Cash flows from operating activities of R17 000 000 ........................................ 8
1.4.4 Non-current assets purchased for R19 000 000 .............................................. 8
1.4.5 Investment of R7 000 000. ............................................................................. 9
QUESTION 2 (25 Marks) .......................................................................................................... 9
2.1 Profitability of the company after the cost of goods sold..................................... 9
2.2 Accounts Payable Payment Period. ................................................................ 10
2.3 Profitability of the company’s own and borrowed capital investment. ................ 10
2.4 Acid-Test (Quick) Ratio................................................................................... 11
2.5 Profitability per share .................................................................................... 12
2.6 The percentage of the profit that has been put back into the company. .............. 12
QUESTION 3 REQUIRED ....................................................................................................... 13
3.1 Calculate the margin of safety (as a percentage expressed to two decimal places).
......................................................................................................................... 14
3.2 Number of units that must be sold if an operating profit of R6 750 000 is desired.
......................................................................................................................... 15
3.3 Justification of advertising.............................................................................. 15
3.4 Operating profit decrease if the sales volume remains unchanged .................... 16
3.5 Selling price per unit that will enable the entity to break-even. ......................... 17
QUESTION 4 ........................................................................................................................ 18
4.1 Payback Period of both projects (expressed in years, months and days). ........... 19
3 | P a g e Education is the most powerful weapon which you can use to change the world
PU E
SHI
NG Y L E NC
OU TO THE GATE OF EXC EL
Education is the most powerful weapon which you can use to change the world
,EXCELCENTRE LEARNING INSTITUTE 0846244729
WARNING: PLEASE NOTE THAT PLAGIARISM IS A SERIOUS ACADEMIC
OFFENSE, therefore students must use this document ONLY as a guideline. Hence
students have regenerated their own (personalized) solutions paying particular
attention to module contents as prescribed by module facilitators, lecturers and
supervisors. This document’s purpose is to compact all sources of information that
might be relevant to students’ assignments, hence additional knowledge on the
provided information is not restricted by the authors. However, submitting this
document as one’s final work is considered unethical, and students should be
penalized. If this document is plagiarized by the users and fails, EXCELCENTRE
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 EVERY DETAIL IN
THIS DOCUMENT IN WRITING THEIR ASSIGNMEN
Education is the most powerful weapon which you can use to change the world
, EXCELCENTRE LEARNING INSTITUTE 0846244729
Table of Contents
............................................................................................................................................. 1
QUESTION 1 (25 Marks) .......................................................................................................... 6
1.1.1 Decrease in payables ................................................................................... 6
1.1.2 Investment income ....................................................................................... 6
1.2 Increase or decrease in non-current liabilities ................................................... 7
1.3 Significant changes to the financial position evident in this Statement of Cash
Flows and not in Statement of Comprehensive Income ........................................... 7
1.4 Comment on the following ............................................................................... 8
1.4.1 Decrease in inventory of R500 000 ................................................................. 8
1.4.2 Increase in receivables of R4 500 000 ............................................................ 8
1.4.3 Cash flows from operating activities of R17 000 000 ........................................ 8
1.4.4 Non-current assets purchased for R19 000 000 .............................................. 8
1.4.5 Investment of R7 000 000. ............................................................................. 9
QUESTION 2 (25 Marks) .......................................................................................................... 9
2.1 Profitability of the company after the cost of goods sold..................................... 9
2.2 Accounts Payable Payment Period. ................................................................ 10
2.3 Profitability of the company’s own and borrowed capital investment. ................ 10
2.4 Acid-Test (Quick) Ratio................................................................................... 11
2.5 Profitability per share .................................................................................... 12
2.6 The percentage of the profit that has been put back into the company. .............. 12
QUESTION 3 REQUIRED ....................................................................................................... 13
3.1 Calculate the margin of safety (as a percentage expressed to two decimal places).
......................................................................................................................... 14
3.2 Number of units that must be sold if an operating profit of R6 750 000 is desired.
......................................................................................................................... 15
3.3 Justification of advertising.............................................................................. 15
3.4 Operating profit decrease if the sales volume remains unchanged .................... 16
3.5 Selling price per unit that will enable the entity to break-even. ......................... 17
QUESTION 4 ........................................................................................................................ 18
4.1 Payback Period of both projects (expressed in years, months and days). ........... 19
3 | P a g e Education is the most powerful weapon which you can use to change the world
