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Fill in the missing amounts on the Cash Flow Statement provided - NSC Accounting - Question 5 - 2020

Question 5

Fill in the missing amounts on the Cash Flow Statement provided. Show workings. Indicate amounts in brackets. Calculate the following financial indicators on 29 Feb... show full transcript

Worked Solution & Example Answer:Fill in the missing amounts on the Cash Flow Statement provided - NSC Accounting - Question 5 - 2020

Step 1

Fill in the missing amounts on the Cash Flow Statement

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Answer

Cash Effects of Operating Activities
- Cash generated from operations can be calculated from:
  
  $Cash\ generated\ from\ operations = Sales - Expenses$
  
  Here, as per given data,
  
  $\text{Sales} = R4,824,000 - R1,600,000 - R312,600 = R3,910,000$ .
1. Cash Effects of Investing Activities
- Calculating fixed assets purchased:
  
  $Fixed\ Assets\ Purchased = R3,760,000 + R1,417,000\ (other\ purchases)$ ,
  
  leading to a total of R5,177,000.
1. Cash Effects of Financing Activities
- Repurchase of shares:
  
  $Repurchase = 120,000\ shares\ \times R96 = R11,520,000$ .
1. Net Change in Cash and Cash Equivalents
- Combining all calculations leads us to:
  
  $Net\ Change = Cash\ Generated - Cash\ Used\ in\ Operations \pm cash\ effects$ .

Step 2

Calculate % operating profit on sales

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Answer

The % operating profit on sales is calculated as follows:

$\text{% Operating Profit} = \frac{Operating Profit}{Sales} \times 100$

Using the provided values:

Sales = R4,824,000 and Operating Profit = R1,122,600:

$\text{% Operating Profit} = \frac{R1,122,600}{R4,824,000} \times 100 = 23.27\%$ .

Step 3

Calculate Acid-test ratio

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Answer

The Acid-test ratio is calculated by:

$\text{Acid-test Ratio} = \frac{Current Assets - Inventories}{Current Liabilities}$

Here,

Current Assets = R774,000, Inventories = R712,800, and Current Liabilities = R660,000:

$\text{Acid-test Ratio} = \frac{R774,000 - R712,800}{R660,000} = 0.1:1$ .

Step 4

Calculate Net current ratio

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Answer

The Net current ratio is calculated by:

$\text{Net Current Ratio} = \frac{Current Assets}{Current Liabilities}$

Substituting the values:

$\text{Net Current Ratio} = \frac{R774,000}{R660,000} = 1.17$ .

Step 5

Calculate Net asset (NAV) per share

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Answer

The NAV per share is calculated as:

$\text{NAV per Share} = \frac{Total\ Equity}{Shares\ Outstanding}$

Here, Total Equity = R5,880,000 (ordinary share capital) and outstanding shares = 1,500,000:

$\text{NAV per Share} = \frac{R5,880,000}{1,500,000} = R3.92$ .

Fill in the missing amounts on the Cash Flow Statement provided - NSC Accounting - Question 5 - 2020

Worked Solution & Example Answer:Fill in the missing amounts on the Cash Flow Statement provided - NSC Accounting - Question 5 - 2020

Fill in the missing amounts on the Cash Flow Statement

Calculate % operating profit on sales

Calculate Acid-test ratio

Calculate Net current ratio

Calculate Net asset (NAV) per share

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