Math Problem Solver

The following are the summarized financial statements of D. limited:

Trading and profit and loss account for the year ended 31 October.

2021 2022

Sh.’000 Sh.’000

Sales 93,500 111,350

Cost of sales (55,120) (72,970)

Gross profit 38,380 38,380

Expenses (26,230) (23,960)

Net profit before interest and tax 12,150 14,420

Loan interest _(450) __(375)

Net profit before tax 11,700 14,045

Taxation (3,510) (5,413.5)

Net profit after tax (Earnings to shareholders) 8,190 8,631.5

Dividend (6,000) (6,000)

Retained profit 2,190 2,631.5

Balance sheet as at 31 October

2021 2022

Sh.’000 Sh.’000 Sh.’000 Sh.’000

Fixed assets:

Freehold premises 10,500 10,500

Plant and equipment 7,200 9,500

Motor vehicles _5,350 23,050 _7,300 27,300

Current assets:

Stock 12,500 11,800

Debtors 9,850 8,900

Bank balance and cash in hand _5,950 28,300 5,864.5 26,564.5

Current liabilities:

Creditors 8,350 7,830

Taxation 3,510 5,413.5

Dividend 3,000 (14,860) 3,000 (16,243.5)

36,490 37,621

Ordinary share capital@20. 30,000 30,000

Reserves _3,490 _5,121

33,490 35,121

15% loan stock _3,000 _2,500

36,490 37,621

Note:

1. 80% of the sales are on credit.

2. The opening stock for the financial year 2021 was valued at Sh.13,000,000.

3. In 2021 the shares were trading averagely at sh.45 and in 2022 at sh.38.

Required:

Analyze the performance of this business using Ratios on:

a) Profitability

b) Liquidity

c) Trading activities

d) Gearing

e) Investors interest