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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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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