Corporate Reporting MAF 2022/2023 AFG 09214

Question Five (please give them as an assignment question) . . p - • n of six public

. given
The details . below are a summary o f t he Statements· of Fmancta . 1 os11.IO . ks
companies engaged in different industries in their quest for project executions of vanous tas ·

A B C D E F
% % % % % %
Land and buildings 10 2 26 24 57 5
Other non-current assets 17 1 34 - 13 73
Stocks and work in progress 44 - 22 55 16 1
Trade debtors 6 77 15 4 1 13
Other debtors 11 - - 8 2 5
Cash and investments 12 20 3 9 11 3
100 100 100 100 100 100
Capital and reserves 37 5 62 58 55 50
Creditors: over one year 12 5 4 13 6 25
Creditors: under one year - - - - - -
Trade 32 85 34 14 24 6
Other 16 5 - 14 15 11
Bank overdraft 3 - - 1 - 8
Total capital employed 100 100 100 100 100 100

The activities of each company are as follows:

I. Operator of a chain of retail supermarkets.
2. Sea ferry operator.
3. Property investor and house builder. Apart from supplying managers, including site
management, for the house building side of its operations, this company completely sub-
contracts all building work.
4. A vertically integrated company in the food industry which owns fanns, flour mills, bakeries
and retail outlets.
5. Commercial bank with a network of branches.
6. Contractor in the civil engineering industry.
Note: no company employs off balance sheet finance such as leasing
You are required:

(a) To state which of the above activi_ties relate to which set of Statement of Financial Posit~ , ,
details giving a brief summary of your reasoning in each case. ?:>~b - \ ~ \'\[\ £cu
Note: no marks will be awarded for matching where no explanation is given.

(b) What do you consider to be the major limitations of ratio analysis as a means of interpr~ tip~
accounting information? 'r /\")_ .q, Vl. (:'.)

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