MISS
MARCH 2013
FINANCIAL MANAGEMENT
Instructions to candidates:
a) Time allowed: Three hours (plus an extra ten minutes’ reading time at the start – do not write anything during this time)
b) Answer any FIVE questions
c) All questions carry equal marks. Marks for each question are shown in [ ]
d) Non-programmable calculators are permitted in this examination
1. The following information relates to Khan Ltd. and has been taken from their books as at 28 February 2013: £000 Taxation for the year 26,000 Turnover (all credit sales) 367,000 Distribution costs 38,000 Inventory at 01/03/12 37,000 Purchases 159,000 Administration expenses 48,000 Inventory 28/02/13 40,000 Interest paid 11,000 Investment income 6,000 Balance on profit & loss account 01/03/12 169,000 Other information:
The market price of an ordinary (equity) share on 28 February 2013 was £1.20 per share.
There are 1 million ordinary shares in issue. TASKS a) Prepare an Income Statement for the year ended 28 February 2013. [8] b) Calculate the following: i The gross profit as a percentage of sales ii The operating profit (PBIT) as a percentage of sales iii The EPS iv The PE ratio [2 each] c) Comment on the profitability of Khan Ltd. [4]
2. The following are the assets and liabilities of Bhadra Ltd as at 28 February 2013: £000 Accounts payable 160 Share premium account 40 Equipment (net) 150 Premises (net) 200 Accounts receivable 250 Inventory 290 Goodwill 120 Vehicles (net) 140 Dividends owing 100 Tax owing 80 Long-term loans 150 Overdraft 110 Ordinary share capital 200 Retained profits 310 TASKS a) Prepare the Position Statement as at 28 February 2013. [8] b) Calculate TWO liquidity ratios. [4] c) Calculate the gearing ratio. [2] d) Explain the process of making a public issue of shares. [6]
continued overleaf
3. a) Explain the advantages of leasing fixed assets (e.g. computers,
FINANCIAL MANAGEMENT
Instructions to candidates:
a) Time allowed: Three hours (plus an extra ten minutes’ reading time at the start – do not write anything during this time)
b) Answer any FIVE questions
c) All questions carry equal marks. Marks for each question are shown in [ ]
d) Non-programmable calculators are permitted in this examination
1. The following information relates to Khan Ltd. and has been taken from their books as at 28 February 2013: £000 Taxation for the year 26,000 Turnover (all credit sales) 367,000 Distribution costs 38,000 Inventory at 01/03/12 37,000 Purchases 159,000 Administration expenses 48,000 Inventory 28/02/13 40,000 Interest paid 11,000 Investment income 6,000 Balance on profit & loss account 01/03/12 169,000 Other information:
The market price of an ordinary (equity) share on 28 February 2013 was £1.20 per share.
There are 1 million ordinary shares in issue. TASKS a) Prepare an Income Statement for the year ended 28 February 2013. [8] b) Calculate the following: i The gross profit as a percentage of sales ii The operating profit (PBIT) as a percentage of sales iii The EPS iv The PE ratio [2 each] c) Comment on the profitability of Khan Ltd. [4]
2. The following are the assets and liabilities of Bhadra Ltd as at 28 February 2013: £000 Accounts payable 160 Share premium account 40 Equipment (net) 150 Premises (net) 200 Accounts receivable 250 Inventory 290 Goodwill 120 Vehicles (net) 140 Dividends owing 100 Tax owing 80 Long-term loans 150 Overdraft 110 Ordinary share capital 200 Retained profits 310 TASKS a) Prepare the Position Statement as at 28 February 2013. [8] b) Calculate TWO liquidity ratios. [4] c) Calculate the gearing ratio. [2] d) Explain the process of making a public issue of shares. [6]
continued overleaf
3. a) Explain the advantages of leasing fixed assets (e.g. computers,