Level (SQ): Level 2

Search 500 + past questions and counting.
Sort & Filter

Reset filters

Search

Filter by Professional Bodies

Filter by Subject

Filter by Topics

Filter by Levels

  • 20 Marks

PSAF – L2 – Q14.3 – Sustainability Reporting Frameworks

Discuss contributions of ISSB, GRI, CDP, IRF, and TCFD to public sector sustainability standards.

Development of public sector sustainability standards may benefit from the existing sustainability frameworks.
Required:
Discuss the contributions of the following frameworks to the advancement of public sector sustainability standards:

  • International Sustainability Standards Board (ISSB);
  • Global Reporting Initiative (GRI);
  • Carbon Disclosure Project (CDP);
  • Integrated Reporting Framework (IRF); and
  • Task Force on Climate-related Financial Disclosures (TCFD).

Login or create a free account to see answers

Login | Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "PSAF – L2 – Q14.3 – Sustainability Reporting Frameworks"

  • 20 Marks

PSAF – L2 – Q14.2- Sustainability Reporting Principles

Discuss five general principles of sustainability reporting in the public sector.

(a) Discuss five general principles of sustainability reporting in the public sector.

(b) Explain four potential challenges of implementing sustainability reporting in the public sector.

Login or create a free account to see answers

Login | Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "PSAF – L2 – Q14.2- Sustainability Reporting Principles"

  • 20 Marks

FM – L2 – Q119 – Business valuations

Calculate offer price for SmallCorp using a forward P/E multiple of 8.0 based on expected earnings

LargeCorp is considering a takeover bid for SmallCorp, another company in the same industry. SmallCorp is expected to have earnings next year of GH₵86,000. If LargeCorp acquires SmallCorp, the expected results from SmallCorp will be as follows:

Year after the acquisition
Year 1 Year 2 Year 3
Sales GH₵200,000 GH₵280,000 GH₵320,000
Cash costs/expenses 120,000 160,000 180,000
Capital allowances 20,000 30,000 40,000
Interest charges 10,000 10,000 10,000
Cash flows to replace assets and finance growth 25,000 30,000 35,000

From Year 4 onwards, it is expected that the annual cash flows from SmallCorp will increase by 4% each year in perpetuity. Tax is payable at the rate of 30%, and the tax is paid in the same year as the profits to which the tax relates. If LargeCorp acquires SmallCorp, it estimates that its gearing after the acquisition will be 35% (measured as the value of its debt capital as a proportion of its total equity plus debt). Its cost of debt is 7.4% before tax. LargeCorp has an equity beta of 1.60. The risk-free rate of return is 6% and the return on the market portfolio is 11%.
Required:

(a) Suggest what the offer price for SmallCorp should be if LargeCorp chooses to value SmallCorp on a forward P/E multiple of 8.0 times.

(b) Calculate a cost of capital for LargeCorp.

(c) Suggest what the offer price for SmallCorp might be using a DCF-based valuation.

Login or create a free account to see answers

Login | Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FM – L2 – Q119 – Business valuations"

  • 20 Marks

PSAF – L2 – Q14.1 – Sustainability Reporting

Explain sustainability reporting in the context of the public sector.

(a) Explain sustainability reporting in the public sector context.

 (b) Discuss five justifications for public sector sustainability reporting.

Login or create a free account to see answers

Login | Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "PSAF – L2 – Q14.1 – Sustainability Reporting"

  • 20 Marks

PSAF – L2 – Q13.5 – Financial Statements Analysis

Prepare and analyze a common size statement of financial position for the Consolidated Fund of Ashanti for 2021 and 2022.

Consolidated Fund of Ashanti
Statement of financial position as at 31 December

2021 GH¢’ 2020 GH¢’
ASSETS
Non-current asset
Property, plant and equipment
Financial assets
Total non-current assets
Current asset
Inventory
Cash and cash equivalents
Current liabilities
Payables
Deposits and trust monies
Total current liabilities
NET ASSETS
FINANCED BY:
Accumulated fund
Non-current liabilities
Domestic debt
External debt

Required:
(a) Prepare a common size statement of financial position for the Consolidated Fund of Ashanti for 2021 and 2022. (10 marks)
(b) Write a report analyzing the common size statement of financial position, discussing the financial position of the Consolidated Fund for 2021 and 2022.

Login or create a free account to see answers

Login | Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "PSAF – L2 – Q13.5 – Financial Statements Analysis"

  • 20 Marks

PSAF – L2 – Q13.4 – Budget Performance Analysis

Prepare a budget performance report for Nkong District Assembly based on the 2023 revenue and expenditure extract.

(a)

Prepare a budget performance report of Anlo District Assembly based on the extract below.

Annual budget GH¢’000 Revised budget GH¢’000 Actual performance GH¢’000
Decentralised transfer 32,000 35,000 42,000
Internally generated fund 56,000 45,000 33,000
Compensation 23,000 20,000 25,700
Goods and services 13,000 18,000 24,000
Non-financial asset 18,000 15,000 12,000

Answer:
Anlo District Assembly
Revenue and expenditure extract of Anlo District Assembly for the year ended 31 December 2023

Revised Budget GH¢ Actual Performance GH¢ Budget Outturn GH¢ Budget Outturn percentage (%)
Decentralised transfer 35,000,000 42,000,000 7,000,000 20.00
IGF 45,000,000 33,000,000 (12,000,000) (26.67)
Compensation 20,000,000 25,700,000 (5,700,000) (28.50)
Goods and services 18,000,000 24,000,000 (6,000,000) (33.33)
Non-financial asset 15,000,000 12,000,000 3,000,000 20.00

(b)

Write a report analyzing the budget outturn whilst assessing the likely causes of the variances during the year and discuss the limitations of your analysis.

Login or create a free account to see answers

Login | Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "PSAF – L2 – Q13.4 – Budget Performance Analysis"

  • 20 Marks

PSAF – L2 – Q13.3- Financial Statements Discussion and Analysis

Compute financial ratios for two West African nations based on provided financial statements.

Nation A and Nation B are West African Nations that attained independence around the same period. Presented below are the financial statements of the two countries.

Statement of financial position as at 31 December 2023

Nation A (GH¢ million) Nation B (GH¢ million)
Current liabilities
Payables 9,300 6,150
Trust monies 2,100 1,350
Domestic debt 24,000 6,750
35,400 14,250
Non-current liabilities
Domestic debt 54,000 27,000
External debt 63,675 33,000
117,675 60,000
Total fund and liabilities 153,075 74,250

Required:
(a) From the information provided, compute for the two countries respectively:

  • Grant to Total Revenue ratio;
  • Wage Bill to Tax Revenue ratio;
  • Interest to Revenue ratio;
  • Debt to GDP ratio;
  • Capital expenditure per Capita; and
  • Wages bill to Total Expenditure ratio.                                                                                                                                                                                                                                                                                                                                                                                        (b) Based on the result in question (a), write a report discussing and analyzing the financial performance and financial position of the two countries. Include in your report the limitations of the analysis of the two countries.

Login or create a free account to see answers

Login | Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "PSAF – L2 – Q13.3- Financial Statements Discussion and Analysis"

  • 20 Marks

FM – L2 – Q118 – Working Capital Management

Assess if AquaPure Ltd is overtrading using financial data and compute relevant ratios.

AquaPure Ltd is a leading producer of mineral water in Zamora. The company sells all of its output to wholesalers on credit terms net 40. The company’s collection policy is somewhat relax, and so the receivables turnover days is currently 53 days. This fairly liberal credit policy has resulted in significant increases in sales revenue in recent years. However, the company has been facing cash flow problems as a significant number of customers take longer than the credit period to settle their accounts. The company typically falls on overdraft facilities from its bankers when it fails to generate adequate cash flows from operations to meet working capital requirements. The average cost of the overdraft facilities is 15% per annum.

Last week, the management team met and discussed the company’s cash flow and liquidity problems with a view to finding solutions to the problems. In that meeting, two proposals were offered to help solve the problems:
Proposal 1: Introduce early settlement discount of 1.5% on accounts that are settled within 10 days in which invoice is sent while the current credit period is maintained. It is estimated that 60% of accounts will be paid within the discount period.
Proposal 2: Switch from financing working capital requirements using the bank overdraft facilities at 15% interest to financing working capital requirements using supplier’s trade credit. Suppliers are willing to supply on credit terms 1/10, net 40. Proponents of the proposals believe that the implementation of their proposal will improve on the company’s financial situation.

Set out below are the company’s statement of profit or loss and statement of financial position for the past three years:

Statement of profit or loss for the year ended 31st December

20X5 (GH¢’000) 20X6 (GH¢’000) 20X7 (GH¢’000)
Revenue 40,000 60,000 122,000
Cost of sales (15,000) (31,000) (58,000)
Gross profit 25,000 29,000 64,000
Selling and administrative expenses (11,000) (17,500) (24,000)
Operating profit 14,000 11,500 40,000

Statement of financial position as at 31st December

20X5 (GH¢’000) 20X6 (GH¢’000) 20X7 (GH¢’000)
Noncurrent assets:
Property, plant and equipment 13,400 19,000 22,500
Current assets:
Inventory 8,000 15,500 25,500
Trade receivables 6,900 11,210 24,210
Cash 1,110 – –
Total current assets 16,010 26,710 49,710
Total assets 29,410 45,710 72,210
Equity:
Stated capital 100 100 100
Income surplus 18,510 28,110 36,810
Shareholders’ equity 18,610 28,210 36,910
Non-current liabilities:
Medium-term loan 3,000 2,500 2,000
Current liabilities:
Trade payables 2,200 3,500 8,600
Dividend payable 5,600 6,400 7,500
Bank overdraft – 5,100 17,200
Total current liabilities 7,800 15,000 33,300
Total liabilities 10,800 17,500 35,300
Total equity and liabilities 29,410 45,710 72,210

Required:
(a) Considering the background information and financial data provided above, would you conclude that AquaPure Ltd is experiencing overtrading? Explain with relevant computations.

(b) Appraise the proposal for early settlement discount (i.e. Proposal 1) and advise on whether it should be accepted for implementation or not. Your appraisal should focus on how the discount policy will influence the company’s profitability. Show all relevant computations.

(c) Appraise the proposal to switch from financing working capital needs using bank overdraft to using suppliers’ trade credit, and advise management accordingly. Show all relevant computations.

(d) Assuming AquaPure Ltd cannot raise additional funds from external sources such as borrowing and new share offer, suggest to management three steps they can take to ease the cash shortages the company is facing.

Login or create a free account to see answers

Login | Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FM – L2 – Q118 – Working Capital Management"

  • 20 Marks

FM – L2 – Q117 – Working Capital Management

Identify three types of working capital policies for an organization.

(A) A good working capital policy should facilitate successful achievement of the key short-term financing objectives of an organisation.

Required:
Identify the three types of working capital policies of an organisation.

(B) Sunyani Farms Ltd is preparing a business plan to apply for a grant from GDAIF for an expansion of its rice production. Current production is 20,000 bags at a variable cost per bag of GH₵12.00 and contribution sales ratio is 25%. Variable cost is for purchases. Current receivable days is 30 days and inventory turnover is 12 times. Suppliers allow 15 days credit and the company maintains absolute cash ratio of 1:1.

The funding support from GDAIF is expected to double the production capacity of the company. Inventory and absolute cash ratios would be maintained but receivables and payables days will increase to 45 days and 30 days respectively. GDAIF policy is to support only the extra working capital needs of applicants.

Required:
Determine the amount that should be applied from GDAIF.

(C) Kumasi Ventures Ltd has a dividend cover of 4 times and recorded the following earnings after tax.

Year Earnings (GH₵)
20X4 100,000
20X5 120,000
20X6 180,000
20X7 220,000
20X8 300,000

Required:
Calculate the average dividend growth rate for Kumasi Ventures Ltd.

Login or create a free account to see answers

Login | Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FM – L2 – Q117 – Working Capital Management"

  • 25 Marks

FM – L2 – Q116 – Management of Receivables and Payables

Evaluate the impact of a new discount policy on Atefufu Foods Limited’s annual profit and suggest an alternative receivables management policy.

Atefufu Foods Limited has annual sales revenue of GH¢8 million. It has a contribution to sales ratio of 45% and its annual fixed costs are GH¢2.5 million. These figures exclude bad debts which are currently 1.25% of sales. All sales are on credit and standard credit terms are 30 days, although customers take on average 45 days to pay. Accounts receivable are financed by a bank overdraft on which interest is payable at 8%.
The company’s management are considering whether to offer a discount of 2.5% for all customers who pay within 14 days, and to extend the credit period for other customers to 60 days. It has been estimated that if this policy is introduced, 25% of customers would take the settlement discount and the rest would take the full 60 days credit offered.
The new policy would result in higher administration costs equal to 0.5% of total gross sales. It is expected that total (gross) sales would be boosted, and would increase by 3% per year. It is also expected that bad debts would fall to 1% of gross sales.

Required:
(A) Calculate the effect that the new policy would have on annual profit and recommend whether the new policy should be introduced. Suggest an alternative policy for the management of receivables that might improve profit by a larger amount.

(B) Esuna Processing Limited is a subsidiary of Atefufu Foods Limited. It uses the Miller-Orr model to manage its cash balances and has set a minimum cash balance of GH¢12,500. The average rate received on investments is currently 5.68%. Over the past year, the standard deviation of daily cash flows has been GH¢2,800. The cost to the company of selling investments or making deposits is GH¢20 per transaction.

Required:
Calculate the spread, the upper limit and the return point for cash balances using the Miller-Orr model and explain the meaning and purpose of these amounts for the purpose of cash management.

(C) Suggest with reasons how Esuna Processing Limited might invest its short-term cash surpluses.

(D) Discuss the main factors that should be taken into consideration by a company’s management when deciding on how its working capital should be funded.

Login or create a free account to see answers

Login | Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FM – L2 – Q116 – Management of Receivables and Payables"

Oops!

This feature is only available in selected plans.

Click here to view all plans

Click on the login button below to login if you’re already subscribed to a plan or click on the upgrade button below to upgrade your current plan.

Login
Upgrade Plan

If you’re not subscribed to a plan, click on the button below to choose a plan

Subscribe to a plan

Pick a Form

Professional Tutor Application Form
Academic Tutor Application Form
Student Tutor Application Form