CASE ANALYSIS Chongwe Zambia Company Plc a company involved in the retail indust
ID: 2328719 • Letter: C
Question
CASE ANALYSIS
Chongwe Zambia Company Plc a company involved in the retail industry. You have been engaged as a Financial Consultant to conduct a detailed review of the financial performance and financial performance of the company over a five year period. You have been provided with the following extracts from the audited accounts for the period 2012 to 2016:
Chongwe Zambia Company Plc
5 year financial record
Statement of Comprehensive Income - extract
2016
2015
2014
2013
2012
K'000
K'000
K'000
K'000
K'000
Turnover
128,458
137,204
123,305
100,502
87,013
PBT
10,401
9,287
21,694
15,463
14,093
Taxation
(3,868)
(3,679)
(8,880)
(6,136)
(4,942)
Net Profit
6,533
5,608
12,814
9,327
9,151
Statement of Financial Position - extract
2016
2015
2014
2013
2012
K'000
K'000
K'000
K'000
K'000
Assets
Non-Current Assets
62,309
67,836
68,172
35,084
33,541
Current Assets
58,580
50,280
57,763
38,152
41,886
Total Assets
120,889
118,116
125,935
73,236
75,427
Equity
Share Capital
761
761
761
761
761
Retained Earnings
53,668
50,388
50,626
42,651
36,274
Revaluation Reserves
30,016
31,006
32,010
12,024
12,581
Total Equity
84,445
82,155
83,397
55,436
49,616
Liabilities
Deferred Tax liability
15,237
16,031
18,546
6,243
6,780
Current Liabilities
21,207
19,930
23,992
11,557
19,031
Total Liabilities
36,444
35,961
42,538
17,800
25,811
Total Equity and Liabilities
120,889
118,116
125,935
73,236
75,427
Required:
Using MS Excel and/or Ms Word:
Prepare a trend analysis of the statement of comprehensive income and the statement of financial position from 2012 to 2016. The trend analysis should show the trend in absolute figures and in percentage terms (30 marks)
Prepare a trend graph showing trend in non-current assets and current assets over the five year period ( 5 marks)
Prepare a trend graph showing trend in total equity and total liabilities over the five year period (5 marks)
Prepare a common size statement for the statement of comprehensive income using turnover as the common base (8 marks)
Prepare a common size statement for the statement of financial position using total assets as the common base(22 marks) f) Calculate the following ratios over the five year period:
Profit before tax(PBT) %
Taxation as a % of PBT
Net profit % iv. Current ratio
v. Total liabilities to total equity ratio vi. Total liabilities to total assets ratio
(13 marks)
g) Prepare a report commenting on the profitability, liquidity and capital structure of Chongwe Zambia Company Plc over the five year period. (17 marks)
[Total 100 marks
Chongwe Zambia Company Plc
5 year financial record
Statement of Comprehensive Income - extract
2016
2015
2014
2013
2012
K'000
K'000
K'000
K'000
K'000
Turnover
128,458
137,204
123,305
100,502
87,013
PBT
10,401
9,287
21,694
15,463
14,093
Taxation
(3,868)
(3,679)
(8,880)
(6,136)
(4,942)
Net Profit
6,533
5,608
12,814
9,327
9,151
Explanation / Answer
Dear student, as per Chegg policy we as an expert allowed to only 4 subparts of any question. I have done 4 subparts.
1 Trend Analysis of Statement of comprehensive income Trend in Absolute figures Amount of Change Base year 2016 2015 2014 2013 2012 K'000 K'000 K'000 K'000 K'000 Turnover 41,445 50,191 36,292 13,489 87,013 PBT (3,692) (4,806) 7,601 1,370 14,093 Taxation 1,074 1,263 (3,938) (1,194) (4,942) Net Profit (2,618) (3,543) 3,663 176 9,151 Trend in Percentage Trend Percentage Base year 2016 2015 2014 2013 2012 Turnover 148% 158% 142% 116% 100% PBT 74% 66% 154% 110% 100% Taxation 78% 74% 180% 124% 100% Net Profit 71% 61% 140% 102% 100% Trend Analysis of Statement of financial position Trend in Absolute figures Amount of Change Base year 2016 2015 2014 2013 2012 K'000 K'000 K'000 K'000 K'000 Assets Non-Current Assets 28,768 34,295 34,631 1,543 33,541 Current Assets 16,694 8,394 15,877 -3,734 41,886 Total Assets 45,462 42,689 50,508 -2,191 75,427 Equity Share Capital 0 0 0 0 761 Retained Earnings 17,394 14,114 14,352 6,377 36,274 Revaluation Reserves 17,435 18,425 19,429 -557 12,581 Total Equity 34,829 32,539 33,781 5,820 49,616 Liabilities Deferred Tax liability 8,457 9,251 11,766 -537 6,780 Current Liabilities 2,176 899 4,961 -7,474 19,031 Total Liabilities 10,633 10,150 16,727 -8,011 25,811 Total Equity and Liabilities 45,462 42,689 50,508 -2,191 75,427 Trend in Percentage Trend Percentage Base year 2016 2015 2014 2013 2012 Assets Non-Current Assets 186% 202% 203% 105% 100% Current Assets 140% 120% 138% 91% 100% Total Assets 160% 157% 167% 97% 100% Equity Share Capital 100% 100% 100% 100% 100% Retained Earnings 148% 139% 140% 118% 100% Revaluation Reserves 239% 246% 254% 96% 100% Total Equity 170% 166% 168% 112% 100% Liabilities Deferred Tax liability 225% 236% 274% 92% 100% Current Liabilities 111% 105% 126% 61% 100% Total Liabilities 141% 139% 165% 69% 100% Total Equity and Liabilities 160% 157% 167% 97% 100% Trend in Absolute number = Current year amount-Base year amount Trend in Percentage = Current year amount/Base year amount x 100Related Questions
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