NAME: FUNGAYI JOHANE MAJURIRA

STUDENT ID: 21981559

COURSE: CORPORATE FINANCE

COURSE CODE: BBAC 351

PROGRAM: BACHELOR OF BUSINESS IN ACCOUNTING

LECTURER

DATE: 25 MARCH 2022

ASSIGNMENT NUMBER: ONE

1
 QUESTION ONE

Deblin plc data as at 31.12.2021 was as follows:

BWP (Millions)
Cash and marketable securities- 100.00
Fixed Assets 283.50
Sales 1,000.00
Net Income 50.00
Quick Ratio 2:1
Current Ratio 3:1
Days sales outstanding (DSO) 40.55 days
Return on Equity (ROE) 12%

Note that Deblin plc had no preferred stock. It only had ordinary shares, current liabilities and
long-term debt.

Required:

Find Deblin’s plc.

i. Accounts receivable 5 Marks

ii. Current liabilities 5 Marks
iii. Current Assets 5 Marks
iv. Total Assets 5 Marks
v. Return on assets(ROA) 5 Marks

TOTAL 25 Marks

Quick Ratio = Current Assets – Stock = 2:1

Current Liabilities

Current Ratio = Current Assets = 3:1

Current Liabilities

Days sales outstanding = Accounts Receivable = 40.55 days

Sales/395 days

ROE = Net Income x Sales x Total Assets = 12%

Sales Total Assets Total Equity

i) Accounts receivable = 40.55 *Sales / 365

= 40.55 * 1000/365

2
 = 40.55 * 2.7937
= 111.10 BWP(Millions)

ii) Current liabilities= Current Assets

3
= 100
3

= 33.33 BWP(Millions)

iii) Current assets = Cash and marketable securities

= 100 BWP(Millions)

iv) Total Assets = Fixed assets + Current assets

= 283.50 + 100

= 383.50 BWP(Millions)

v) Return on assets(ROA) = Net Income

Total assets

= 50
383.50

= 0.13037

= 13%