Efficiency – Knowsia

FM – L2 – Q127 – Value for Money in Public Financial Management

Explain the concept of value for money in PFM and its elements with illustrations.

Question

(a) Value for money is critical in public financial management (PFM) and therefore every public policy and programme should be subjected to the value for money test.

Required:

(i) What do you understand by value for money in relation to PFM? (2 marks)

(ii) Explain, with illustration, the elements of value for money and their interrelations.

(b) The flagship programme of government is a Free Secondary Education Programme (FSEP) which aims at improving quality and access to secondary education through the removal of cost barriers.

Required:

Discuss steps that should be taken to ensure value for money in the implementation of the FSEP. (10 marks)

Answer

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Tags: Economy, Effectiveness, Efficiency, Equity, Free Education, Public Financial Management, Value for Money
Level: Level 2

Topic: Introduction to financial management

MA – L2 – Q68 – Other aspects of performance measurement

Suggest non-financial performance measures for service quality, marketing effectiveness, and personnel in a financial institution.

Question

Suggest non-financial performance measurements for a financial institution under the following headings:

Service quality
Marketing effectiveness
Personnel

Answer

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Tags: Customer satisfaction, Efficiency, Market share, Marketing effectiveness, Non-financial performance, Personnel, Service quality, Staff turnover
Level: Level 2

Topic: Other aspects of performance measurement

MA – L2 – Q58 – Performance analysis

Calculate and define financial ratios for Akwasi and Kofi, two manufacturing companies, using their financial statements.

Question

The statements of profit or loss and statements of financial position of two manufacturing companies in the same sector are set out below.

Statement of profit or loss for Akwasi

	ZC¢
Revenue	150,000
Cost of sales	(60,000)
Gross profit	90,000
Interest payable	(500)
Distribution costs	(13,000)
Administrative expenses	(15,000)
Profit before tax	61,500
Income tax expense	(16,605)
Profit for the period	44,895

Statements of financial position for Akwasi and Kofi

	Akwasi	Kofi
	ZC¢	ZC¢
Assets
Non-current assets
Property		280,000
Plant and equipment	190,000	500,000
	190,000	780,000
Current assets
Inventories	12,000	26,250
Trade receivables	37,500	105,000
Cash at bank		22,000
	49,500	153,250
Total assets	240,000	933,250
Equity and liabilities
Equity
Share capital	156,000	174,750
Retained earnings	51,395	390,830
	207,395	565,580
Non-current liabilities
Long-term debt	10,000	250,000
Current liabilities
Trade payables	22,605	117,670
Total equity and liabilities	240,000	933,250

Required:

Define and calculate the following ratios for each company:

(a) Gross profit percentage (2 marks)

(b) Net profit percentage (2 marks)

(d) Asset turnover (2 marks)

The statements of profit or loss and statements of financial position of two manufacturing companies in the same sector are set out below.

Statement of profit or loss for Akwasi

	ZC¢
Revenue	150,000
Cost of sales	(60,000)
Gross profit	90,000
Interest payable	(500)
Distribution costs	(13,000)
Administrative expenses	(15,000)
Profit before tax	61,500
Income tax expense	(16,605)
Profit for the period	44,895

Statements of financial position for Akwasi and Kofi

	Akwasi	Kofi
	ZC¢	ZC¢
Assets
Non-current assets
Property		280,000
Plant and equipment	190,000	500,000
	190,000	780,000
Current assets
Inventories	12,000	26,250
Trade receivables	37,500	105,000
Cash at bank		22,000
	49,500	153,250
Total assets	240,000	933,250
Equity and liabilities
Equity
Share capital	156,000	174,750
Retained earnings	51,395	390,830
	207,395	565,580
Non-current liabilities
Long-term debt	10,000	250,000
Current liabilities
Trade payables	22,605	117,670
Total equity and liabilities	240,000	933,250

Required:

Define and calculate the following ratios for each company:

(a) Gross profit percentage (2 marks)

(b) Net profit percentage (2 marks)

(d) Asset turnover (2 marks)

The statements of profit or loss and statements of financial position of two manufacturing companies in the same sector are set out below.

Statement of profit or loss for Akwasi

	ZC¢
Revenue	150,000
Cost of sales	(60,000)
Gross profit	90,000
Interest payable	(500)
Distribution costs	(13,000)
Administrative expenses	(15,000)
Profit before tax	61,500
Income tax expense	(16,605)
Profit for the period	44,895

Statements of financial position for Akwasi and Kofi

	Akwasi	Kofi
	ZC¢	ZC¢
Assets
Non-current assets
Property		280,000
Plant and equipment	190,000	500,000
	190,000	780,000
Current assets
Inventories	12,000	26,250
Trade receivables	37,500	105,000
Cash at bank		22,000
	49,500	153,250
Total assets	240,000	933,250
Equity and liabilities
Equity
Share capital	156,000	174,750
Retained earnings	51,395	390,830
	207,395	565,580
Non-current liabilities
Long-term debt	10,000	250,000
Current liabilities
Trade payables	22,605	117,670
Total equity and liabilities	240,000	933,250

Required:

Define and calculate the following ratios for each company:

(a) Gross profit percentage

(b) Net profit percentage

(d) Asset turnover

Answer

Find Related Questions by Tags, levels, etc.

Tags: Asset Turnover, Efficiency, Financial Ratios, Gross Profit, Net profit, Performance Analysis, Profitability, ROCE
Level: Level 2

Topic: Performance Analysis

MA – L2 – Q57 – Performance analysis

Evaluate KINTAMPO LTD's performance using financial ratios for two divisions, Amir and Mo.

Question

Zestco is an importer and retailer of vegetable oils. Extracts from the financial statements for this year and last are set out below.

Statements of profit or loss for the years ended 30 September

	Year 7	Year 6
	ZC¢’000	ZC¢’000
Revenue	2,160	1,806
Cost of sales	(1,755)	(1,444)
Gross profit	405	362
Distribution costs	(130)	(108)
Administrative expenses	(260)	(198)
Profit before tax	15	56
Income tax expense	(6)	(3)
Profit for the period	9	53

Statements of financial position as of 30 September

	Year 7	Year 6
	ZC¢’000	ZC¢’000
Assets
Non-current assets
Property, plant and equipment	78	72
Current assets
Inventories	106	61
Trade receivables	316	198
Cash	6
	428	259
Total assets	506	331
Equity and liabilities
Equity
Ordinary shares	110	85
Preference shares	23	11
Share premium	15
Revaluation reserve	20
Retained earnings	78
Current liabilities
Bank overdraft	49
Trade payables	198
Current tax payable	7
Total equity and liabilities

Required:

Define and calculate the following ratios for each year:

(a) Gross profit percentage

(b) Net profit percentage

(d) Asset turnover

(e) Current ratio

(f) Quick ratio

(g) Average receivables collection period

(h) Average payables period

(i) Inventory turnover.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Asset Turnover, Current Ratio, Efficiency, Financial Ratios, Gross Profit, Liquidity, Net profit, Performance Analysis, Profitability, Quick Ratio, ROCE
Level: Level 2

Topic: Performance Analysis

Tag (SQ): Efficiency

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FM – L2 – Q127 – Value for Money in Public Financial Management

Explain the concept of value for money in PFM and its elements with illustrations.

MA – L2 – Q68 – Other aspects of performance measurement

Suggest non-financial performance measures for service quality, marketing effectiveness, and personnel in a financial institution.

MA – L2 – Q58 – Performance analysis

Calculate and define financial ratios for Akwasi and Kofi, two manufacturing companies, using their financial statements.

MA – L2 – Q57 – Performance analysis

Evaluate KINTAMPO LTD's performance using financial ratios for two divisions, Amir and Mo.

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FM – L2 – Q127 – Value for Money in Public Financial Management

Explain the concept of value for money in PFM and its elements with illustrations.

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MA – L2 – Q68 – Other aspects of performance measurement

Suggest non-financial performance measures for service quality, marketing effectiveness, and personnel in a financial institution.

You're reporting an error for "MA – L2 – Q68 – Other aspects of performance measurement"

MA – L2 – Q58 – Performance analysis

Calculate and define financial ratios for Akwasi and Kofi, two manufacturing companies, using their financial statements.

You're reporting an error for "MA – L2 – Q58 – Performance analysis"

MA – L2 – Q57 – Performance analysis

Evaluate KINTAMPO LTD's performance using financial ratios for two divisions, Amir and Mo.

You're reporting an error for "MA – L2 – Q57 – Performance analysis"

Our offerings

Contact Info

Customer

Get In Touch

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