Sample Company Three: Health & Fitness Pty Ltd. Below are data extracted from the Statement of financial performance and Statement of financial position of Health & Fitness Pty Ltd over a number of years: Health & Fitness Pty Ltd Income statement 2013
Sample Company Three: Health & Fitness Pty Ltd.
Below are data extracted from the Statement of financial performance and Statement of financial position of Health & Fitness Pty Ltd over a number of years:
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Health & Fitness Pty Ltd Income statement |
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2013 $ |
2012 $ |
2011 $ |
2010 $ |
2009 $ |
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Sales revenue |
115,750 |
117,564 |
88,263 |
93,575 |
85,651 |
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Cost of sales |
60,750 |
61,257 |
44,542 |
48,671 |
41,275 |
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Gross Profit |
55,000 |
56,307 |
43,721 |
44,904 |
44,376 |
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Selling expenses |
(7,451) |
(7,158) |
(6,581) |
(6,224) |
(5,941) |
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Marketing expenses |
(5,872) |
(6,150) |
(5,568) |
(5,674) |
(5,275) |
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Distribution expenses |
(6,894) |
(5,214) |
(4,897) |
(4,764) |
(4,617) |
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Administration expenses |
(4,751) |
(4,000) |
(3,596) |
(3,650) |
(3,700) |
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Net Profit before tax and finance costs |
30,032 |
33,785 |
23,079 |
24,592 |
24,843 |
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Finance costs |
(12,500) |
(11,250) |
(7,650) |
(8,320) |
(8,635) |
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Finance income |
8,500 |
7,300 |
5,800 |
6,100 |
4,700 |
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Net finance income (cost) |
(4,000) |
(3,950) |
(1,850) |
(2,220) |
(3,935) |
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Net Profit before tax |
26,032 |
29,835 |
21,229 |
22,372 |
20,908 |
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Income tax (30%) |
(7,810) |
(8,951) |
(6,639) |
(6,712) |
(6,272) |
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Net Profit after tax |
18,822 |
20,884 |
14,860 |
15,660 |
14,636 |
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Health & Fitness Pty Ltd Balance Sheet as at 31st December 2013 |
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2013 $ |
2012 $ |
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Current Assets |
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Cash and cash equivalents |
14500 |
12451 |
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Accounts receivable |
21750 |
23675 |
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Inventories |
24625 |
18454 |
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Other current assets |
10458 |
9475 |
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Total current assets |
71333 |
64055 |
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Non-current assets |
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Property, plant and equipment |
45000 |
39850 |
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Agriculture assets |
20532 |
22400 |
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Intangible assets |
25120 |
21863 |
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Total non-current assets |
90652 |
84113 |
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Total assets |
161985 |
148168 |
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Current liabilities |
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Accounts payable |
28450 |
22642 |
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Short term borrowings |
25600 |
23800 |
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Total current liabilities |
54050 |
46442 |
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Non-current liabilities |
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Long-term borrowings |
42750 |
46210 |
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Deferred tax liabilities |
15862 |
25644 |
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Total non-current liabilities |
58612 |
71854 |
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Total liabilities |
112662 |
118296 |
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Net assets |
49323 |
29872 |
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Equity |
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|
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Issued capital |
35000 |
20000 |
|
Retained earnings |
14323 |
9872 |
|
Total equity |
49323 |
29872 |
Required
a) From the information provided above, perform a trend analysis (in table form) for the following Statement of financial performance items:
i. Revenue
ii. Net Profit before tax and finance costs
iii. Profit after tax
It is suggested that you use the following table structure to assist you in your answer to this question.
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b) Provide a brief (approx 200 words) report analyzing the trend figures.
c) From the information provided to calculate the ratios for the year 2013 that reflect the following:
i. Health & Fitness Pty Ltd’s ability to generate income from its asset investments.
ii. The average period of time it takes for Health & Fitness Pty Ltd to sell its inventory.
iii. The dollars of current assets available to repay a dollar of current liabilities.
iv. The number of times Health & Fitness Pty Ltd’s earnings before interest and tax covers its net finance expense.
v. The percentage of Health & Fitness Pty Ltd’s sales revenue dollars results in earnings before interest and tax.
vi. Health & Fitness Pty Ltd’s efficiency in generating income per dollar investments in assets.
vii. The average period of time it takes for Health & Fitness Pty Ltd to collect money from its customers.
d) Assess Health & Fitness Pty Ltd’s financial position and performance and comment on any ratios you consider being significant.
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