- 20 Marks
FR – April 2022 – L2 – Q4 – Financial Statement Analysis
Analyze the performance and position of Abayie Ltd based on its financial statements, comparing it with key sector ratios, and prepare a report for shareholders.
Question
Abayie Ltd is a listed company in Ghana and operates many supermarkets in Ghana. The following statements relate to Abayie Ltd for the year 2020:
Statement of Profit or Loss for the year ended 31 December 2020
Additional Information:
Key ratios for the supermarket sector (based on the latest available financial statement of 12 listed entities in the sector) are as follows:
- Gross Profit margin: 5.9%
- Return on Capital Employed (ROCE): 3.9%
- Net Assets Turnover: 1.93 times
Required:
Prepare a report addressed to the shareholders of Abayie Ltd, analyzing the performance and position of Abayie Ltd based on the financial statements and additional information provided. The report should also include comparisons with key sector ratios (where appropriate). (Total: 20 marks)
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