Topics: Generally Accepted Accounting Principles, Asset, Balance sheet Pages: 8 (3015 words) Published: June 15, 2011


Sales have increased over the years, but the rate of this increase is not steady. The highest sales point was in 2006. Cost of sales and expenses with the exception of other expenses have increased at a steady rate. Other operating expenses have fluctuated over the years; the lowest point was in the first year with the highest being in 2006. Finance cost seems to have reached a peak in 2006 and the fallen by 2008. Net Profit after Tax follows a similar pattern to sales. CC3 CONSOLIDATED BALANCE SHEET

Share capital has grown over the years and spiked in 2008. Long-term financing shows a peak in 2006. The deferred tax liabilities have remained more or less the same. Trade and other payables show a sudden increase in 2006. Markup accrued reaches a peak in 2005. The current portion of long term financing shows a peak in the first year, declines in the second and then reaches a constant level. Total liabilities increase and reach a peak at 2008. There is an increase in property, plant and equipment owing to expansion in 2008. Long-term advance declines over the years. Long-term deposits remain constant. Stocks, spares and loose tools show a sudden rise in 2006 and 2008 both. Stock in trade increases rapidly in 2006 and continues to grow at a rapid rate until 2008. Trade debts reach a peak in 2005 and then fluctuate around a value in following years. Current assets double in 2005 and 2008 both. CC4 STATEMENTS OF CASH FLOWS

Depreciation has increased at a steady rate over the years. Operating cash flow before working capital changes has largely fluctuated, increasing to a peak in 2006 and falling again. The highest point can be observed in 2008. Finance costs have decreased in 2008 by almost half. Stores and stocks increase at a steady rate but show a spike in 2008. Trade debts reach a peak in 2006 and then fluctuate. Other receivables, however, show an increase. Net cash from operating activities shows a peak in 2006. The greatest addition to plant, property and equipment is witnessed in 2008. Net cash used in investing activities reaches a peak t 2008. Net cash used in financing activities shows an upward trend with a peak in 2008. Cash and cash equivalents show a peak in 2008, with a smaller peak in 2006. *CC5 FIVE-YEAR GROWTH RATES Sales and net-income have increased over the years but the per-share results are different because the number of shares goes up considerably in 2008, reducing per-share values and making growth rates negative. No dividends were paid in the first two years and as a result, the growth in dividends per share has been 100%. Equity per share has shown a growth over the years. Issuing more shares has resulted in lower sales and net income per share. The negative effect is especially felt on net income per share. This is not a good sign for the company, as it will negatively affect share prices financial markets. Financing the expansion in 2008 with a growth in equity seems to have been an unreasonable step.



Government levies reach an all time low in 2006, resulting in higher net sales for the same year. Cost of sales is lowest in 2006 and reaches peaks in 2008, with the result that gross profit is lowest in 2008 and highest in 2006. Other operating incomes dip and then increase. Distribution costs and administrative costs both follow a similar trend, dipping in 2005 and then rising steadily. Accordingly, in 2006, there is a peak in profit from operations of 36% of sales and the dip in 2008 to 10%, attributable to the movement in cost of sales. Net profit after taxation shows a peak of 21% of sales in 2006. This can directly be attributed to the low cost of goods sold in the same year. 2006 has been the most profitable year in the period. CC7 COMMON SIZE BALANCE SHEETS

Share capital as a percentage of assets has declined over the years. The company goes from reporting an accumulated loss of a considerable 38%, to...
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Financial Statement Analysis Essay
  • Walmart Financial statement Analysis Essay
  • Financial Statement Analysis Essay
  • Essay about Financial statement analysis
  • An Analysis of Financial Situation of Fauji Cement Company Ltd Essay
  • Analysis of Microsoft Financial Statements Essay
  • Essay on Financial Statement Analysis 2
  • Financial Statement Analysis Lecture 4 Essay

Become a StudyMode Member

Sign Up - It's Free