NSTRUCTIONS – The following information has been extracted from the financial statements of Dandy & Grandee Superstores Ltd. Extracts from the Income Statements for year ended 30 April …… 2019 2018 $’000 $’000 Sales 11,200 9,750 Cost of sales 8,460 6,825 Net profit before tax 465 320 This is after charging: Depreciation 360 280 Loan note interest 80 60 Interest on bank overdraft 15 9 Audit fees 12 10
INSTRUCTIONS –
The following information has been extracted from the financial statements of Dandy & Grandee Superstores Ltd.
Extracts from the Income Statements for year ended 30 April ……
2019 2018
|
|
$’000 |
$’000 |
|
Sales |
11,200 |
9,750 |
|
Cost of sales |
8,460 |
6,825 |
|
Net profit before tax |
465 |
320 |
|
This is after charging: |
|
|
|
Depreciation |
360 |
280 |
|
Loan note interest |
80 |
60 |
|
Interest on bank overdraft |
15 |
9 |
|
Audit fees |
12 |
10 |
|
|
1`2019 |
2018 |
||||
|
|
$’000 |
$’000 |
$’000 |
$’000 |
||
|
Assets |
|
|
|
|
||
|
Non -current assets |
|
1850 |
|
1430 |
||
|
Current assets |
|
|
|
|
||
|
Inventory |
640 |
|
490 |
|
||
|
Receivables |
1230 |
|
1080 |
|
||
|
Cash |
80 |
1950 |
120 |
1690 |
||
|
TOTAL ASSETS |
|
3800 |
|
3120 |
||
|
EQUITY & LIABILITIES |
|
|
|
|
||
|
Equity |
|
|
|
|
||
|
Ordinary share capital |
800 |
|
800 |
|
||
|
Retained earnings |
1310 |
2110 |
930 |
1730 |
||
|
Non-current liabilities |
|
|
|
|
||
|
10% loan stock |
|
800 |
|
600 |
||
|
Current liabilities |
|
|
|
|
||
|
Bank overdraft |
110 |
|
80 |
|
||
|
Payables |
750 |
|
690 |
|
||
|
|
30 |
890 |
20 |
790 |
||
|
|
|
3800 |
|
3120 |
||
|
The following figures have been extracted from the records of D & G Superstores Ltd for the previous year as well as the relative industry averages:
|
||||||
|
|
D&G 30 April 2018 |
Industry Average 30 April 2018 |
||||
|
ROCE (capital employed = equity + debentures) |
16.70% |
18.50% |
||||
|
Profit/sales |
3.90% |
4.73% |
||||
|
Asset turnover |
4.29 |
3.91 |
||||
|
|
2.0 |
1.9 |
||||
|
Quick ratio |
1.42 |
1.27 |
||||
|
Gross profit margin |
30.00% |
35.23% |
||||
|
Accounts receivable collection period |
40 days |
52 days |
||||
|
Accounts payable payment period |
37 days |
49 days |
||||
|
Inventory turnover (times) |
13.90 |
18.30 |
||||
|
Gearing |
26.37% |
32.71% |
||||
You are required to:
Write a report to the board of directors of Dandy & Grandee Superstores Ltd. analyzing the performance of the company when compared with the previous year and against industry average.
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