Checklulu Company Limited is a supplier of

Personal Protective Equipment for industries.

Though the company has somewhat a good
liquidity position, the company has some
operational difficulties or challenges to deal with.
The activity ratios show poor or low efficiencies.
High cost of sales coupled with corresponding
low sales year on year greatly affects the
profitability of the company. Management is
entreated to as matter of necessity and for
ensuring the company continue in business, to put
in place measures to reduce high cost of sales
while they work more efficiently to improve sales
volumes in subsequent years.

UNIVERSITY OF GHANA
GRADUATE BUSINESS
SCHOOL
EXECUTIVE MASTERS OF
BUSINESS
ADMINISTRATION
MANAGERIAL ACCOUNTING
TERM PAPER

NAME: SETH BRENYA INDEX NO: 10631294

Table of Contents
BACKGROUND OF THE COMPANY ................................................................................... 2
ACCOUNTING POLICIES: ..................................................................................................... 2
Basis of Accounting ............................................................................................................... 2
Basis of Preparation: .............................................................................................................. 2
Basis of Depreciation: ............................................................................................................ 2
Inventories: ............................................................................................................................. 2
Receivables............................................................................................................................. 3
Stated Capital ......................................................................................................................... 3
ANALYSES OF COMPANY PERFORMANCE ..................................................................... 3
VERTICAL ANALYSIS ....................................................................................................... 3
Income Statement ............................................................................................................... 3
Balance sheet ...................................................................................................................... 5
TREND ANALYSES ............................................................................................................. 6
Income Statement ............................................................................................................... 6
Balance Sheet ..................................................................................................................... 8
RATIO ANALYSES OF COMPANY .................................................................................... 10
PROFITABILITY RATIO ................................................................................................... 11
LIQUIDITY RATIO ............................................................................................................ 11
ACTIVITY RATIO .............................................................................................................. 13
SOLVENCY RATIO ........................................................................................................... 14
INVESTMENT RATIO ....................................................................................................... 15
CONCLUSION ........................................................................................................................ 16
REFERENCE:.......................................................................................................................... 17
APPENDIX: ............................................................................................................................. 18

Page 1 of 22

BACKGROUND OF THE COMPANY

Checklulu Company limited is registered and incorporated in Ghana and is engaged in the
distribution and sale of personal protective equipment and health and safety devices, signage,
and equipment from other companies to industrial companies. Checklulu Company Limited is
solely into wholesale distribution and retailing of the aforementioned products. Thus, the
company is a trading company and operates as one of the distributors of global standard
products to various retailers and consumers across industry in the country.
The company since its inception has done well in the mining sector of industry. Checklulu
Company Limited has small-medium and large companies as their customers and they have
grown in serving their customers well and still meeting its customers needs.
ACCOUNTING POLICIES:
Basis of Accounting
The statement of affairs of Checklulu Company Limited have been prepared on the historical
cost convention and incorporate the following accounting policies consistent in dealing with
the items which are considered in relation to the companys financial statement.
Basis of Preparation:
The financial statements are prepared in accordance with international Financial Reporting
standards (IFRS) and the companies code 1963 (Act 179).
Basis of Depreciation:
Depreciation is provided on a straight line basis at rates calculated to write-off the cost of each
asset over its estimated useful life. The annual rates generally in use are as follows:
Office Equipment

25%

Furniture and Fittings

5%

Motor Vehicle

20%

Inventories:
Inventories are valued at the lower of cost and net realizable value and the first in first out
principle is used. Cost is made up of the purchase price plus all direct cost incurred in bringing
the item to its present location and condition.

Page 2 of 22

Receivables
Receivables are stated at their net realisable value after providing for known specific debt
considered to be doubtful.
Stated Capital
The stated capital consists of 50,000 shares of no par value issued at GH 50,000 cash. There
are no shares in treasury or unpaid on any call.
ANALYSES OF COMPANY PERFORMANCE
VERTICAL ANALYSIS
Income Statement
Table 1: Vertical Analysis on Income Statement
2013

2014

2015

Revenue (Net Revue)

100

100

100

Cost of Sales

95.18

95.55

96.00

Gross Profit

4.82

4.45

4.00

Administration and Selling Expenses

3.50

3.21

2.91

Earnings before Interest and Tax

1.33

1.24

1.08

Finance Cost

0.75

0.65

0.97

Profit/(Loss) after Finance cost

0.58

0.60

0.11

Tax

0.16

0.15

0.03

Net Profit

0.42

0.45

0.08

Table 1 represents the relationship between sales (net revenue) and other variables in the
income statement with all the other variables represented as a percentage of the net revenue.
The vertical analysis considers the relationship between sales and other variables in the income
statement. The relationship of most of the variables in the income statement does not show an
impressive performance of the company judging from the figures from the table 1. Cost of sales
(which represents all the necessary cost incurred to bring the product to saleable points) as a
Page 3 of 22

percentage of sales has been on the high side at 95.18%, 95.55% and 96.00% in 2013, 2014
and 2015 respectively. This resorted in the low gross profit rate expressed as a percentage of
sales at 4.82%, 4.45%, and 4.00% in 2013, 2014, and 2015 respectively. Administration and
selling expenses fell throughout the three year period in terms of percentage to sales. Thus, it
only recorded 3.50% in 2013, 3.21% in 2014 and then 2.91% in 2015; this could not really
affect the operating profit (earnings before interest and tax) which also fell from 1.33% in 2013
to 1.08% in 2015 because of a corresponding increase in the percentage of cost of sales to the
sales. The unimpressive record resulted in a low record of net profit as a percentage to sales.
For this situation to change management must find measures to reduce the cost of sales of the
company. One way is to check the supply chain of the company and reduce any cumbersome
procedures adding unnecessary cost to the company. The suppliers could also be looked at, if
there is a sole supplier situation the company can find alternatives to save or reduce the cost of
the material in the situation. The company may need to improve on their negotiation abilities
or expertise aside looking at buying in bulk quantities from suppliers to potentially secure some
discounts.

120

VERTICAL ANALYSIS

120

100

100

2013
2014
2015

80
60

80
60

40

40

20

20

Chart 1: Graph of Vertical Analysis on Income Statement

From chart 1 above, graph trend shows explicitly that the performance of Checklulu company
Limited has not change significantly over the three years under consideration.

Page 4 of 22

Balance sheet
Table 2: Vertical analysis on Balance Sheet
2013

2014

2015

Non Current Assets

21.06

19.78

5.45

Inventories

65.81

62.26

70.80

Vat Accounts

4.35

3.06

5.98

Accounts Receivables

6.34

9.84

15.89

Cash and Bank Balances

2.45

5.06

1.89

Accounts Payables

7.96

11.65

9.56

Taxation

0.80

1.73

0.48

Bank Overdraft

9.87

11.51

40.61

Directors Current Accounts

32.65

30.05

19.40

Directors Loan

31.75

26.48

17.09

Stated Capital

10.5

8.83

5.70

Income Surplus

6.39

9.74

7.17

The table 2 above shows a relationship between total assets and other components in the
balance sheet (statement of financial position) with all the other components represented as a
percentage of total assets. From the above table the non-current assets of the company have
been reducing from 21.06% in 2013, to 19.78% in 2014 then to 5.45% in 2015. This can be
due to depreciation of the non-current asset of the company or due to asset disposal by the
company.
It can also be seen from the table 2 that the company holds a lot of its assets in the form of
inventory in the three-year period from 2013 to 2015. The companys inventories as a
proportion of its total assets increased from 65.81% in 2013 to 62.26% in 2014 then to 70.80%
2015. The accounts receivables of the company also kept on increasing from 6.34%, to 9.84%
then to 15.89% of total assets in 2013, 2014 and 2015 respectively.
Page 5 of 22

Accounts payable of the company also increased from 7.96% in 2013 to 11.65% in 2014 but
fell to 9.56% in 2015. The increased in inventories and accounts receivables and the fall in the
accounts payable can account for the low percentage of the cash and bank balance position of
the company which increased from 2.45% in 2013 to 5.06% in 2014 but fell sharply to 1.89%
in 2015.
Figures in table 2 above also indicates that the company financed a greater percentage of its
total assets with debt, most of them being bank overdraft which increased from 9.87% to
11.51% then sharply to 40.61% of total asset in 2013, 2014 and 2015 respectively. Directors
current accounts declined from 32.65%, 30.05% to 19.40% in 2013, 2014, and 2015
respectively but still forms a greater percentage of the companys liabilities used to finance its
total assets. Directors loan which is the long-term liability of the company also reduced from
31.75% in 2013 to 17.09% in 2015. Equity form a lower percentage of the total assets financing
and even stated capital falling from 10.50% in 2013 to 5.70% in 2015. The income surplus of
the company increased from 6.39% in 2013 to 7.17% in 2015 but not enough to consolidate
the position of the companys equity.
TREND ANALYSES
Income Statement
Table 3: Trend analysis on Income Statement
2013

2014

2015

Revenue ( Net Revue)

100

180.60

240.29

Cost of Sales

100

181.30

242.38

Gross Profit

100

166.62

199.04

Administration and Selling Expenses

100

165.59

200.28

Earnings before Interest and Tax

100

169.33

195.77

Finance Cost

100

156.13

310.62

Profit/(Loss) after Finance cost

100

186.49

46.38

Tax

100

171.28

42.59

Net Profit

100

192.17

47.79

Page 6 of 22

The table 3 shows data that represents the growth in the companys operations over a threeyear period covering 2013 to 2015 with the performance in 2013 being the basis of
measurement. A careful investigation of the table 3 above indicates that the growth of the
company has been steadily over the three-year period under review.

Net revenue rose

throughout the three-year period, compared to the base year of 2013, it grew to 180.60% in
2014, thus showing 80.60% over that of 2013 then to 240.29% in 2015 which also shows over
140% of 2013. Cost of sales also grew to 181.30% in 2014 and then to 242.38% in 2015.
The administration and selling expenses of the company also followed the same pattern of the
net revenue and the cost of sales increasing to 165.59% in 2014 and then to 200.28% in 2015
with 2013 as the base year. From the table 3, though the net revenue increased over the period,
the increase in cost of sales and the administration and selling expenses caused the massive fall
in the profit. This resulted in profit recording only 192.17% in 2014 and a massive fall of profit
to only 47.79% compared to that of the base year.
350
Revenue ( Net
Revue)

300

Cost of Sales
250

percentage

Gross Profit
200

Administration and
Selling Expenses
Earnings before
Interest and Tax

150

Finance Cost
100
Profit/(Loss) after
Finance cost
50

Tax
Net Profit

2013
2008

2014
2009

2015
2010

years

Chart 2: Graph of Trend Analysis on Income Statement

The trend chart 2 above shows the growth in each item on the face of the income statement
over the three years under consideration. From the chart 2, almost all the other items increased
throughout the period but net profit decreased massively to only 47.79%.
Page 7 of 22

Statement of Financial Position (Balance Sheet)

Table 4: Trend Analysis on Balance Sheet

2013

2014

2015

Non Current Assets

100.00

112.61

48.04

Inventories

100.00

113.43

199.86

Vat Accounts

100.00

84.23

255.07

Accounts Receivables

100.00

186.19

466.00

Cash and Bank Balances

100.00

247.86

143.06

Accounts Payables

100.00

175.47

223.06

Taxation

100.00

258.47

110.39

Bank Overdraft

100.00

139.76

764.23

Directors Current Accounts

100.00

110.37

110.37

Directors Loan

100.00

100.00

100.00

Stated Capital

100.00

100.00

100.00

Income Surplus

100.00

182.86

208.57

The results from the above table 4 indicate that the company saw a marginal increase in noncurrent assets in 2014 to 112.61% but it declined massively in 2015 to 48.04%. This can be
due to disposal of the assets or the rates of depreciation on those assets are high. The account
receivables recorded the massive improvement in all the current assets which rose to 186.19%
in 2014 then to 466.00% in 2015. Inventories also recorded 113.43% in 2014 then to 199.86%
in 2015. Cash and bank balance rose to 247.86% in 2014 but fell to 143.06% in 2015. The
increase in the accounts receivables must be managed well to transform them to cash as quick
as possible to enhance the cash position of the company.
The account payables also followed a similar fashion of trend as those in the current assets. Its
recorded an increase to 175.47% in 2014 over that of the 2013 (ie. about 75.47% above that of
2013) and also to 233.06% in 2015. Even though the companys tax liability increased to
Page 8 of 22

258.47% in 2014, it fell to 110.39% in 2015. The bank overdraft increased to 139.76% in 2014
then increased as high as 764.23% in 2015 over that of 2013; indicating the companies over
reliance on liabilities for its operations.
A careful investigation of the results from the table 4 reveals that the company experienced
stagnant growth in both shareholders deposit and stated capital which registered a record of
100% throughout the period. The companys income surplus increased to 182.86% in 2014 and
then to 208.57% in 2015. The growth in income surplus of the company can be attributed to
the fact that for the three-year period there have always been 100% plough back in the
company.

Page 9 of 22

RATIO ANALYSES OF COMPANY

Table 5: Ratio Analysis
2013

2014

2015

PROFITABILITY RATIO

Net Profit Margin

0.42

0.45

0.08

Gross Profit Margin

4.82

4.45

4.00

Return on Assets

3.43

5.51

0.88

Return on Equity

20.00

30.00

7.00

LIQUIDITY RATIO

2013

2014

2015

Current Ratio

1.54:1

1.46:1

1.35:1

Quick Test Ratio

0.26:1

0.33:1

0.34:1

Cash Ratio

0.05:1

0.09:1

0.03:1

ACTIVITY RATIO

2013

2014

2015

Inventory Holding Period

28.96 days

18.19 days

24.09 days

Inventory Turnover

12.43

19.79

14.94

Receivable Collection Period

2.79 days

2.87 days

5.41 days

Creditors Payment Period

3.68 days

3.56 days

3.39 days

Total Assets Turnover

8.18 times

12.32 times

10.58 times

LONG TERM SOLVENCY RATIO

2013

2014

2015

Debt to Total Assets

83.00

81.00

87.00

Gearing ratio

187.10

142.62

132.83

Interest Cover

1.77

1.92

1.11

INVESTOR RATIO

2013

2014

2015

Earnings per Share

0.32

0.62

0.16

Page 10 of 22

PROFITABILITY RATIO
Measures of profitability indicate the capacity of an entity to make reasonable gains out of its
activities. Profitability ratios try to explain a companys ability to make the needed returns
given its shareholders equity, total assets and the relationship between returns and sales. The
profitability ratios from the table 5 above do not show a great performance of the company.
Even though the company recorded an increase in net profit margin from 0.42% in 2013 to
0.45% in 2014 this was still not good for the company to experience strong growth. In 2015
the net profit margin fell hugely to 0.08%. This can be attributed to the cost of sales recorded
by the company which on the average stood at about 95% (vertical analysis-income statement)
of net revenue of the period under review.
The unimpressive record of net profits recorded by the company over the three year period
translated into a low record of return on assets. Return on assets increased from 3.43% in 2013
to 5.51% in 2014 but fell to 0.88% in 2015. Return on equity gives an indication of the returns
enjoyed by shareholders on their investment over the period. This measure of the company
increased from 20.00% in 2013 to 30.00 in 2014 indicating a positive performance but the trend
of the other profitability ratios fell greatly in 2015 to 7%. Though the 2013 and 2014 return on
equity was good, that of 2015 was not impressive; recording only 7% in 2015. Management
should put measures in place to check on the profitability performance of the company. The
profitability performance of the company is shown in the chart 3 below.
35
30
Gross
Profit
Margin
Net Profit
Margin

percentage

25
20
15

Return on
Assets

10
5

Return on
Equity

2013
2008

2014
2009
Years

Chart 3: Graph depicting the trend of Profitability ratio

Page 11 of 22

2015
2010

LIQUIDITY RATIO
Liquidity is a measure of the ability of an organization to meet its current liabilities as and when
they fall due with its current assets base. Thus, the ratio depicts the firms ability to meet its
current liabilities without posing any threat to its current assets base. The liquidity position of
the company does not indicate a remarkable performance over the period under review. Current
ratio decreased from 1.54: 1, to 1.46:1 and then to 1.35:1 in 2013, 2014 and 2015 respectively.
Like the current ratio, the quick ratio even though increased from 0.26:1 in 2013 to 0.34:1 in
2015, it could not meet half of the current liabilities of the company. The quick ratio of the
company shows that the company could barely meet 40% of its current liabilities when they
fall due with its current assets components without its inventories.

LIQUIDITY RATIO
1.8
1.6

2013

2014

2015

1.4
1.2
1
0.8
0.6
0.4
0.2
0
Current Ratio

Quick Test Ratio

Cash Ratio

Chart 4: Graph depicting trend of liquidity position of company

Cash ratio reveals that the company could hardly meet its indebtedness whenever it falls due
with its cash and cash equivalents. (ie.0.05: 1 in 2013, 0.09 in 2014 but fell to 0.03:1 in 2015).
This puts the cash position of the company in a difficult situation. This could be that the
company has either been depending on borrowed funds to meet its due debts with its
accompanied cost in the form of financing cost or default payment affecting the credit
worthiness of the company. This also explains the large bank overdraft registered by the
company over the period. This calls for urgent attention from management.

Page 12 of 22

The liquidity chart 4 above indicates that over the years current ratio declined but quick ratio
increased marginally.
ACTIVITY RATIO
Activity ratios are the category of ratios that seeks to assess the effectiveness and efficiency of
the firm taking into consideration how it uses its resources to generate revenue or sales. Thus,
measures of activity give an indication of how efficient the management of a company is in
utilizing its resources towards achieving the value maximization the companys goals.
Receivable collection period increased from 2.79 days in 2013 to 3.56 days in 2014 and further
increased to 5.41 days in 2015. Though the receivable collection period of the company are not
too bad but as compared to the creditors payment period the company should do well to reduce
it to enhance the cash flow of the company. The creditors payment period of the company
recorded a decrease from 3.68days in 2013 to 3.56 days in 2014 and also to 3.39 days. If the
reduction in the creditors payment period are due to discounts for early payments then that
should be encouraged but if not the company should check it.
The inventory holding period of the company was not impressive even though fell from 28.96
days in 2013 to 18.19 days in 2014 it increased again to 24.09 days. The inventory turnover
ratio increased from 12.43 times in 2013 which to 19.79 times in 2014. This reduced to 14.94
times in 2015 but was still better than that of the 2013. From the above its clear that converting
companys inventories into sales have been unstable. This development has the possibility to
affect the cash cycle period of the company and this might have resulted in the unimpressive
cash level record by the company.
The asset turnover record recorded by the company was better since its managed to use assets
to generate 8.18 times of sales in 2013, increased it to 12.32 times in 2014 but fell to 10.58 in
2015. This was still on a better side in terms of the company using its total assets to generate
sales. The situation of the activity ratio is indicated in the chart below.

Page 13 of 22

ACTIVITY RATIO
25

40
35

20
30
25

15

20
10

15
10

5
5
0

2013

2014

2015

Inventory Turnover

Total Assets Turnover

Inventory Holding Period

Receivable Collection Period

Creditors Payment Period

Chart 5: Graph showing trend of efficiency of operation

SOLVENCY RATIO
Closely related to liquidity ratios is the solvency ratio, just as the liquidity ratio considers the
firms ability to meet its current obligations or liabilities, the solvency ratio takes into
cognizance the firms ability to meet its non-current or long-term liabilities or obligations. In
2013 a total of 83% of the companys total assets were financed with debts; this decreased to
81% in 2014 but was still high. In 2015 debt to asset ratio increased again to 87%. The gearing
ratio was from the ratios was extremely high which recorded 187.10% in 2013, decreased to
142.62% in 2014 and further decreased to 132.83% in 2015. From these its observed that the
company is highly geared and if management do not put certain measures to curtail it can really
affect the operations of the company in situation where such funds fails to flow as expected.
The interest cover ratio of the company could suggest that it has a high default rate since the
companys capacity to meet its interest payments as and when they fell due even though
increased from 1.77 times in 2013 o 1.92 times in 2014 it greatly fell to 1.11 times in 2015.
The current development casts a doubt on the companys credit worthiness.
From the financial report of the company, its true that most of the debts are owned to directors
but for the company to be sustainable it must strive to meet interest payments than it is now
and also increase net profit and reserves of the company in other to increase capital and to also
Page 14 of 22

meet some debt payments. The chart below indicate that as the gearing ratio and debt to total
assets increases times interest earned decreases, this situation if continues will worsen the
riskiness of the firms.

SOLVENCY RATIO
200

2.5
2

150

1.5
100
1
50
0

0.5

2013

2014
Debt to Total Assets

Gearing ratio

2015

Interest Cover

Chart 6: Graph showing trend of Solvency Ratio

INVESTMENT RATIO
Earnings per share over the three-year period were not so impressive as it recorded GH0.32
per share 2013 but increased it to GH 0.62 per share in 2014. This fell sharply to GH0.16 in
2015. This means that in 2015 only 16% of the price per share was earned as profit by
shareholders. The result in 2015 could be attributed to the fall in profit margin posted by the
company in 2015. The situation is as shown in the diagram below.

INVESTMENT RATIO
0.62

0.32

0.16

2013
2008

2014
2009

Chart 7: Graph showing Investment Ratio trend

Page 15 of 22

2015
2010

CONCLUSION
Checklulu Company Limited seems to have somewhat a good liquidity position but the
company may have some operational difficulties or challenges to deal with. The activity ratios
show poor or low efficiencies. High cost of sales coupled with corresponding low sales year
on year greatly affects the profitability of the company. The ability of the company to source
for long term finance is in doubt since the company already is highly geared.
Management is entreated to as mater of necessity and for ensuring the company continue in
business, to put in place measures to reduce high cost of sales while they work more efficiently
to improve sales volumes in subsequent years.
With an increase in revenue and a significant reduction in cost of goods (cost of sales) through
prudent, transparent and accountable supply and procurement processes, control of stock levels
and improved negotiation skills and closing good deals on cost of goods from suppliers, the
Checklulu Company Limited could surmount their financial and operational challenges and be
more profitable and appropriate value and sustain the business.
With a sum of 200 million based on the analysis and the proposed mitigation strategy for the
company, I would invest in Checklulu Company Limited with it current financial and
operational difficulties. There are still potential opportunities for Checklulu to grow given a
diligent, effective and efficient management review.

Page 16 of 22

Reference:
Annual Reports of CHECKLULU COMPANY LIMITED for 2015
Annual Reports of CHECKLULU COMPANY LIMITED for 2014
Annual Reports of CHECKLULU COMPANY LIMITED for 2013

Page 17 of 22

Appendix:

CHECKLULU COMPANY LIMITED

INCOME STATEMENT

Revenue (Net Value)

Less Cost of Sales
Gross Profit
Less Admin. & Selling Exp.
EBIT
Finance Cost
Profit/Loss
Tax
Net Profit/Loss

2013

2014

2015

GH

GH

GH

3864091
3677720
186371

6978406
6667874
310532

9284931
8913975
370956

135072
51299
29002
22297
6069
16228

223669
86863
45282
41581
10395
31186

270528
100428
90087
10341
2585
7756

STATEMENT OF FINANCIAL POSITION

Non-Current assets
Current Assets
Inventories
Vat Account
Accounts Receivables
Cash and Bank Bal.
Total Current Assets
Total Assets
Equity and Liability
Stated Capital
Income Surplus
Total Equity
Liabilities
Accounts Payable
Taxation
Bank Overdraft
Directors current Accounts
Directors Loan
Total Equity and Liabilities

99482

112023

47792

310896
20560
29932
11574
372962
472444

352638
17317
55730
28687
454372
566395

621351
52442
139483
16558
829834
877626

50000
30172
80172

50000
55174
105174

50000
62930
112930

37610
3800
46632
154230
242272
150000
392272
472444

65994
9826
65171
170230
311221
150000
461221
566395

83893
4195
356378
170230
614696
150000
764696
877626

Page 18 of 22

Income Statement

Vertical Analysis

Trend Analysis

2013

2014

2015

2013

2014

2015

Revenue (Net Value)

100.00

100.00

100.00

100.00

180.60

240.29

Less Cost of Sales

95.18

95.55

96.00

100.00

181.30

242.38

Gross Profit

4.82

4.45

4.00

100.00

166.62

199.04

Less Admin. & Selling Exp.

3.50

3.21

2.91

100.00

165.59

200.28

EBIT

1.33

1.24

1.08

100.00

169.33

195.77

Finance Cost

0.75

0.65

0.97

100.00

156.13

310.62

Profit/Loss

0.58

0.60

0.11

100.00

186.49

46.38

Tax

0.16

0.15

0.03

100.00

171.28

42.59

Net Profit/Loss

0.42

0.45

0.08

100.00

192.17

47.79

21.06

19.78

5.45

100.00

112.61

48.04

Inventories

65.81

62.26

70.80

100.00

113.43

199.86

Vat Account

4.35

3.06

5.98

100.00

84.23

255.07

Accounts Receivables

6.34

9.84

15.89

100.00

186.19

466.00

Cash and Bank Bal.

2.45

5.06

1.89

100.00

247.86

143.06

Total Current Assets

78.94

80.22

94.55

100.00

121.83

222.50

Total Assets

100.00

100.00

100.00

100.00

119.89

185.76

Stated Capital

10.58

8.83

5.70

100.00

100.00

100.00

Income Surplus

6.39

9.74

7.17

100.00

182.86

208.57

Total Equity

16.97

18.57

12.87

100.00

131.19

140.86

Accounts Payable

7.96

11.65

9.56

100.00

175.47

223.06

Taxation

0.80

1.73

0.48

100.00

258.58

110.39

Bank Overdraft

9.87

11.51

40.61

100.00

139.76

764.23

Directors current Accounts

32.65

30.05

19.40

100.00

110.37

110.37

Total Current liabilities

51.28

54.95

70.04

100.00

128.46

253.72

Directors Loan

31.75

26.48

17.09

100.00

100.00

100.00

Total Liabilities

83.03

81.43

87.13

100.00

117.58

194.94

Total Equity and Liabilities

100.00

100.00

100.00

100.00

119.89

185.76

Statement of Financial Position

Non-Current assets
Current Assets

Equity and Liability

Liabilities

Page 19 of 22

LIQUIDITY RATIO

2013

2014

2015

Current Asset

372,962

454,372

829,834

Current Liability

242,272

311,221

614,696

1.54:1

1.46:1

1.35:1

Current Asset - Inventory

62,066

101,734

208,483

Current Liability

242,272

311,221

614,696

0.26:1

0.33:1

0.34:1

Cash and cash at Bank

11,574

28,687

16,558

Current Liabilities

242,272

311,221

614,696

0.05:1

0.09:1

0.03:1

AV. Stock * 360 days

310,896 * 360

352,638 * 360

621,351*360

Sales

3,864,091

6,978,406

9,284,931

Current Ratio

Quick Test Ratio

Cash Ratio

ACTIVITY RATIO
Inventory Holding Period

28.96

18.19

24.09

Inventory Turnover
Sales

3,864,091

6,978,406

9,284,931

Inventory

310,896

352,638

621,351

12.43

19.79

14.94

Receivable Collection Period

Receivable * 360 days

29,932 * 360

55,730 * 360

139,483 *360

Sales

3,864,091

6,978,406

9,284,931

2.79

2.87

5.41

Payables * 360 days

37,610 *360

65,994 *360

83,893 *360

Cost of Sales

3,677,720

6,667,874

8,913,975

3.68

3.56

3.39

Sales

3,864,091

6,978,406

9,284,931

Total Asset

472,444

566,395

877,626

8.18 times

12.32 times

10.58 times

Creditors Payment Period

Total Asset Turnover

Page 20 of 22

SOLVENCY
Debt to Total Assets
Total Debt * 100

392,272 *100

461,221 *100

764,696 *100

Total Assets

472,444

566,395

877,626

83%

81%

87%

Gearing ratio
Long term Debt * 100

150,000 *100

150,000 *100

150,000 *100

Total Equity

80,172

105,174

112,930

187.10%

142.62%

132.83%

Interest Cover
EBIT

51,299

Int. Payment

29,002

86,863

100,428
45,282

90,087

1.77 times

1.92 times

1.11 times

Net profit * 100

16,228 *100

31,186 *100

7,756*100

Sales

3,864,091

6,978,406

9,284,931

PROFITABILITY RATIO
Net profit margin

0.42%

0.45%

0.08%

Gross Profit Margin

Gross Profit * 100

186,371 *100

310,532 *100

370,956 *100

Sales

3,864,091

6,978,406

9,284,931

4.82%

4.45%

4.00%

Return on Assets
Net profit * 100

16,228 *100

31,186*100

7,756*100

Total Assets

472,444

566,395

877,626

3.43%

5.51%

0.88%

Return on Equity
Net profit * 100

16,228*100

31,186 *100

7,756*100

Total Equity

80,172

105,174

112,930

20.00%

Page 21 of 22

30.00%

7.00%

INVESTMENT RATIO
Earnings per Share
Net Profit

16,228

31,186

7,756

No. Of Ordinary Shares

50,000

50,000

50,000

0.32

0.62

Page 22 of 22

0.16