You have been provided with financial statements for TKC limited for the year ending 31December 2023. All figures are Botswana PulaTKC Limited Statement of Income for the year ended 2023 2023 2022 Revenue 5 330 761 5 420 595 Cost of sales (4 141 605) (4 167 850) Gross Profit 1 189 156 1 252 746 Other income 45 191 52 617 Loss of disposal of equipment (201) (656) Impairment reversal (9 868) Changes in credit allowances 16 954 (1 412) Admin expenses (855 718) (901 870) Seling and distribution (35 119) (63 200) Other expenses (134 689) (140 741) Non-monetary translation 589 20 366 Profit 226 163 207 982 Finance income 103 110 Finance cost (110 036) (105 005) Profit before tax 116 230 105 005 Taxation (34 336) (6 076) Profit for the year 81 894 98 929 TKC Limited Statement of Financial position as at 31 December 2023 2023 2022 Non-current assets Property and equipment 1 067 576 1 218 626 Goodwill 64 477 65 735 Goodwill 8 136 10 270 Investments in new projects 1 160 189 1 294 631 Current assets Inventories 340 692 305 476 Related entities 5 310 5 414 Advances and deposits 44 298 39 095 Trade Receivables 63 810 63 645 Tax receivables 10 094 9 887 Restricted cash 5 143 12 845 Cash and cash equivalents 73 920 60 727 TOTAL ASSETS 1 703 456 1 840 801 Equity and Liabilities Share capital (P1.00 each) 906 196 906 196 Adjustment (29 616) (29 616) Inflation reserve 192 930 158 920 Forex translation (473 964) (396 412) Retained loss (938 206) (1 006 538) Long Term Borrowing 1 207 108 984 596 Current Liabilities Trade payables 568 461 571 225 Payments to related parties 43 734 82 794 Current portion of long-term loan 86 129 192 289 Lease liabilities 149 445 153 116 Taxation 29 483 7 248 Bank 67 525 148 788 Other Liabilities 167 799 Total equity and liabilities 1 703 456 1 840 801 Additional information▪ Purchases constitute 50% of cost of sales▪ Share price remain stable at BWP 0.52 per share Required:a) Analyse and evaluate the financial performance over the two-year period by usingappropriate ratios: Liquidity, Profitability, Efficiency, and Investment. b) Based on findings in (a), provide recommendations how the firm can improve its financialposition

You have been provided with financial statements for TKC limited for the year ending 31December 2023. All figures are Botswana PulaTKC Limited Statement of Income for the year ended 2023 2023 2022 Revenue 5 330 761 5 420 595 Cost of sales (4 141 605) (4 167 850) Gross Profit 1 189 156 1 252 746 Other income 45 191 52 617 Loss of disposal of equipment (201) (656) Impairment reversal (9 868) Changes in credit allowances 16 954 (1 412) Admin expenses (855 718) (901 870) Seling and distribution (35 119) (63 200) Other expenses (134 689) (140 741) Non-monetary translation 589 20 366 Profit 226 163 207 982 Finance income 103 110 Finance cost (110 036) (105 005) Profit before tax 116 230 105 005 Taxation (34 336) (6 076) Profit for the year 81 894 98 929 TKC Limited Statement of Financial position as at 31 December 2023 2023 2022 Non-current assets Property and equipment 1 067 576 1 218 626 Goodwill 64 477 65 735 Goodwill 8 136 10 270 Investments in new projects 1 160 189 1 294 631 Current assets Inventories 340 692 305 476 Related entities 5 310 5 414 Advances and deposits 44 298 39 095 Trade Receivables 63 810 63 645 Tax receivables 10 094 9 887 Restricted cash 5 143 12 845 Cash and cash equivalents 73 920 60 727 TOTAL ASSETS 1 703 456 1 840 801 Equity and Liabilities Share capital (P1.00 each) 906 196 906 196 Adjustment (29 616) (29 616) Inflation reserve 192 930 158 920 Forex translation (473 964) (396 412) Retained loss (938 206) (1 006 538) Long Term Borrowing 1 207 108 984 596 Current Liabilities Trade payables 568 461 571 225 Payments to related parties 43 734 82 794 Current portion of long-term loan 86 129 192 289 Lease liabilities 149 445 153 116 Taxation 29 483 7 248 Bank 67 525 148 788 Other Liabilities 167 799 Total equity and liabilities 1 703 456 1 840 801 Additional information▪ Purchases constitute 50% of cost of sales▪ Share price remain stable at BWP 0.52 per share Required:a) Analyse and evaluate the financial performance over the two-year period by usingappropriate ratios: Liquidity, Profitability, Efficiency, and Investment. b) Based on findings in (a), provide recommendations how the firm can improve its financialposition

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

You have been provided with financial statements for TKC limited for the year ending 31
December 2023. All figures are Botswana Pula
TKC Limited Statement of Income for the year ended 2023

	2023	2022
Revenue	5 330 761	5 420 595
Cost of sales	(4 141 605)	(4 167 850)
Gross Profit	1 189 156	1 252 746
Other income	45 191	52 617
Loss of disposal of equipment	(201)	(656)
Impairment reversal		(9 868)
Changes in credit allowances	16 954	(1 412)
Admin expenses	(855 718)	(901 870)
Seling and distribution	(35 119)	(63 200)
Other expenses	(134 689)	(140 741)
Non-monetary translation	589	20 366
Profit	226 163	207 982
Finance income	103	110
Finance cost	(110 036)	(105 005)
Profit before tax	116 230	105 005
Taxation	(34 336)	(6 076)
Profit for the year	81 894	98 929

TKC Limited Statement of Financial position as at 31 December 2023

	2023	2022
Non-current assets
Property and equipment	1 067 576	1 218 626
Goodwill	64 477	65 735
Goodwill	8 136	10 270
Investments in new projects	1 160 189	1 294 631
Current assets
Inventories	340 692	305 476
Related entities	5 310	5 414
Advances and deposits	44 298	39 095
Trade Receivables	63 810	63 645
Tax receivables	10 094	9 887
Restricted cash	5 143	12 845
Cash and cash equivalents	73 920	60 727
TOTAL ASSETS	1 703 456	1 840 801
Equity and Liabilities
Share capital (P1.00 each)	906 196	906 196
Adjustment	(29 616)	(29 616)
Inflation reserve	192 930	158 920
Forex translation	(473 964)	(396 412)
Retained loss	(938 206)	(1 006 538)
Long Term Borrowing	1 207 108	984 596
Current Liabilities
Trade payables	568 461	571 225
Payments to related parties	43 734	82 794
Current portion of long-term loan	86 129	192 289
Lease liabilities	149 445	153 116
Taxation	29 483	7 248
Bank	67 525	148 788
Other Liabilities		167 799
Total equity and liabilities	1 703 456	1 840 801

Additional information
▪ Purchases constitute 50% of cost of sales
▪ Share price remain stable at BWP 0.52 per share

Required:
a) Analyse and evaluate the financial performance over the two-year period by using
appropriate ratios: Liquidity, Profitability, Efficiency, and Investment.
b) Based on findings in (a), provide recommendations how the firm can improve its financial
position

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