FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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QUESTION SIX
The following financial statements relate to ZB Plc.
|
ZB PLC |
|
|
|
Statement of comprehensive Income for the year ended 31st December: |
|
|
|
|
2021 |
2020 |
|
|
K'000 |
K'000 |
|
Revenue |
3,068,959 |
2,305,425 |
|
Cost of sales |
-2,024,857 |
-1,346,701 |
|
Gross profit |
1,044,102 |
958,724 |
|
Other expenses |
-244,307 |
-458,473 |
|
Net impairment credit on financial assets |
12,291 |
3,002 |
|
Distribution costs |
-208,749 |
-178,028 |
|
Administrative expenses |
-413,157 |
-302,323 |
|
Operating profit |
190,180 |
22,902 |
|
Finance Income |
2,978 |
1,557 |
|
Interest Expense |
-86,936 |
-15,974 |
|
|
|
|
|
Profit before income tax |
106,222 |
8,485 |
|
Income tax credit (expense) |
41,730 |
-2,546 |
|
Profit for the year |
147,952 |
5,939 |
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Other comprehensive income |
|
|
|
Total comprehensive income for the year |
147,952 |
5,939 |
|
|
|
|
|
ZB PLC |
||
|
|
||
|
2021 |
2020 |
|
|
K'000 |
K'000 |
|
|
Assets |
||
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Non-current assets |
||
|
Property, plant and equipment |
2,488,670 |
2,149,855 |
|
Intangible asset |
22,661 |
22,816 |
|
Loan receivable |
2,095 |
|
|
2,511,331 |
2,174,766 |
|
|
Current assets |
||
|
Inventories |
609,424 |
426,640 |
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Trade and other receivables |
238,316 |
150,474 |
|
Current income tax asset |
89533 |
79152 |
|
Cash and bank balances |
129,429 |
401,007 |
|
Total current assets |
1,066,702 |
1,057,273 |
|
Total assets |
3,578,033 |
3,232,039 |
|
Equity and liabilities |
||
|
Capital and reserves |
||
|
Share capital |
5,460 |
5,460 |
|
Share premium |
450,207 |
450,207 |
|
|
683,337 |
535,385 |
|
Total equity |
1,139,004 |
991,052 |
|
Non-current liabilities |
||
|
|
523,375 |
610,979 |
|
Total non-current liabilities |
523,375 |
610,979 |
|
Current liabilities |
||
|
Borrowings |
697,110 |
35,000 |
|
Trade and other payables |
1,216,544 |
1,595,008 |
|
Total current liabilities |
1,913,654 |
1,630,008 |
|
Total liabilities |
2,437,029 |
2,240,987 |
|
Total equity and liabilities |
3,576,033 |
3,232,039 |
(Source: ZB PLc)
Required:
- Calculate the following ratios for 2021 and 2020 for ZB Plc:
- Gross profit %
- Net profit %
- Trade debtor days
- Trade creditor days
Current ratio - Acid test ratio
- Interest cover ratio
- Total liabilities to equity ratio
- Return on equity
- Return on total assets
- Prepare a report commenting on the performance of the company using ratios calculated in (a) above and specifically addressing the following performance areas:
- Profitability
- Efficiency
- Liquidity
- Gearing
Investment returns
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