Shareholders of Hartley Corp are concerned that the company has recorded a reduced level of profits in 2020 compared to 2019. The Profit for the year has reduced from K272.4m to K5.9m. You have been requested by the concerned shareholder to prepare a detailed report analysing the financial performance Capital and reserves attributable to the Company's equity holders Share capital Share premium Retained earnings Non-current liabilities Deferred income tax STATEMENT OF FINANCIAL POSITION Total equity and non-current liabilities Non-current assets Prperty, plant and equipment Intangible assets Account receivable Current assets Inventories Trade and other receivables Current income tax Cash and cash equivalents Current liabilities Borrowings Trade and other paybles Total assets less current liabilities As at 31 December 2020 5,460 450,207 535,385 991,052 610,979 610,979 1,602,031 2,149,855 22,816 2,095 2,174,766 426,640 150,474 79,152 401,007 1,057,273 35,000 1,595,008 1,630,008 1,602,031 2019 5,460 450,207 584,047 1,039,714 635,648 635,648 1,675,362 2,059,246 24,601 2,083,847 486,667 255,294 10,542 225,942 978,445 32,761 1,354,169 1,386,930 1,675,362
Shareholders of Hartley Corp are concerned that the company has recorded a reduced level of profits in 2020 compared to 2019. The Profit for the year has reduced from K272.4m to K5.9m. You have been requested by the concerned shareholder to prepare a detailed report analysing the financial performance Capital and reserves attributable to the Company's equity holders Share capital Share premium Retained earnings Non-current liabilities Deferred income tax STATEMENT OF FINANCIAL POSITION Total equity and non-current liabilities Non-current assets Prperty, plant and equipment Intangible assets Account receivable Current assets Inventories Trade and other receivables Current income tax Cash and cash equivalents Current liabilities Borrowings Trade and other paybles Total assets less current liabilities As at 31 December 2020 5,460 450,207 535,385 991,052 610,979 610,979 1,602,031 2,149,855 22,816 2,095 2,174,766 426,640 150,474 79,152 401,007 1,057,273 35,000 1,595,008 1,630,008 1,602,031 2019 5,460 450,207 584,047 1,039,714 635,648 635,648 1,675,362 2,059,246 24,601 2,083,847 486,667 255,294 10,542 225,942 978,445 32,761 1,354,169 1,386,930 1,675,362
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
100%
Shareholders of Hartley Corp are concerned that the company has recorded a reduced level of
profits in 2020 compared to 2019. The Profit for the year has reduced from K272.4m to K5.9m. You
have been requested by the concerned shareholder to prepare a detailed report analysing the
financial performance
Prepare a
I) horizontal Analysis
II) Vertical Analysis of the Statement of Financial position .
![Shareholders of Hartley Corp are concerned that the company has recorded a reduced level of
profits in 2020 compared to 2019. The Profit for the year has reduced from K272.4m to K5.9m. You
have been requested by the concerned shareholder to prepare a detailed report analysing the
financial performance
Capital and reserves attributable to the Company's equity holders
Share capital
Share premium
Retained earnings
Non-current liabilities
Deferred income tax
STATEMENT OF FINANCIAL POSITION
Total equity and non-current liabilities
Non-current assets
Prperty, plant and equipment
Intangible assets
Account receivable
Current assets
Inventories
Trade and other receivables
Current income tax
Cash and cash equivalents
Current liabilities
Borrowings
Trade and other paybles
Total assets less current liabilities
As at 31 December
2020
5,460
450,207
535,385
991,052
610,979
610,979
1,602,031
2,149,855
22,816
2,095
2,174,766
426,640
150,474
79,152
401,007
1,057,273
35,000
1,595,008
1,630,008
1,602,031
2019
5,460
450,207
584,047
1,039,714
635,648
635,648
1,675,362
2,059,246
24,601
2,083,847
486,667
255,294
10,542
225,942
978,445
32,761
1,354,169
1,386,930
1,675,362](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F00d7c758-dab1-47f5-aeda-c251a2015430%2F50488e1f-aa8d-4dc9-a780-f81a54ad1eb0%2Fdmb5vo_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Shareholders of Hartley Corp are concerned that the company has recorded a reduced level of
profits in 2020 compared to 2019. The Profit for the year has reduced from K272.4m to K5.9m. You
have been requested by the concerned shareholder to prepare a detailed report analysing the
financial performance
Capital and reserves attributable to the Company's equity holders
Share capital
Share premium
Retained earnings
Non-current liabilities
Deferred income tax
STATEMENT OF FINANCIAL POSITION
Total equity and non-current liabilities
Non-current assets
Prperty, plant and equipment
Intangible assets
Account receivable
Current assets
Inventories
Trade and other receivables
Current income tax
Cash and cash equivalents
Current liabilities
Borrowings
Trade and other paybles
Total assets less current liabilities
As at 31 December
2020
5,460
450,207
535,385
991,052
610,979
610,979
1,602,031
2,149,855
22,816
2,095
2,174,766
426,640
150,474
79,152
401,007
1,057,273
35,000
1,595,008
1,630,008
1,602,031
2019
5,460
450,207
584,047
1,039,714
635,648
635,648
1,675,362
2,059,246
24,601
2,083,847
486,667
255,294
10,542
225,942
978,445
32,761
1,354,169
1,386,930
1,675,362
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Follow-up Questions
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Follow-up Question
Prepare a Vertical and Horizontal Analysis of the Statement of Comprehensive Income.
![Statement of profit or loss and other comprehensive income
Revenue from contracts with customers
Cost of sales
Gross profit
Distribution costs
Administrative expenses
Impairment credit/ (charge) on financial assets
Other income
Other expenses
Operating profit
Finance income
Finance costs
Finance (costs) / income.net
Profit before income tax
Income tax expense
Profit for the year
Other comprehensive income
Total comprehensive income for the year
Earnings per share for profit attributable to the equity holders of the
Company
Basic and diluted (Kwacha per share)
Notes
6
78
11
11
12
14
For the year ended 31 December
2020
2,305,425
(1,346,701)
958,724
(178,028)
(302,323)
3,002
697
(459,170)
22,902
1,557
(15,974)
(14,417)
8,485
(2,546)
5,939
5,939
0.01
2019
2,092,589
(1,175,799)
916,790
(140,264)
(403,055)
(1,802)
26,876
(66,591)
331,954
55,036
(30,108)
24,928
356,882
(82,468)
274,414
274,414
0.50](https://content.bartleby.com/qna-images/question/00d7c758-dab1-47f5-aeda-c251a2015430/d83f4be8-2b9c-462a-9246-54da1c2ef761/8xtd6jp_thumbnail.jpeg)
Transcribed Image Text:Statement of profit or loss and other comprehensive income
Revenue from contracts with customers
Cost of sales
Gross profit
Distribution costs
Administrative expenses
Impairment credit/ (charge) on financial assets
Other income
Other expenses
Operating profit
Finance income
Finance costs
Finance (costs) / income.net
Profit before income tax
Income tax expense
Profit for the year
Other comprehensive income
Total comprehensive income for the year
Earnings per share for profit attributable to the equity holders of the
Company
Basic and diluted (Kwacha per share)
Notes
6
78
11
11
12
14
For the year ended 31 December
2020
2,305,425
(1,346,701)
958,724
(178,028)
(302,323)
3,002
697
(459,170)
22,902
1,557
(15,974)
(14,417)
8,485
(2,546)
5,939
5,939
0.01
2019
2,092,589
(1,175,799)
916,790
(140,264)
(403,055)
(1,802)
26,876
(66,591)
331,954
55,036
(30,108)
24,928
356,882
(82,468)
274,414
274,414
0.50
Solution
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