COLLEGE OF BUSINESS AND ECONOMICS
JOHANNESBURG BUSINESS SCHOOL
DEPARTMENT OF BUSINESS MANAGEMENT
INDIVIDUAL ASSIGNMENT
SUBJECT:
BUSINESS MANAGEMENT
CODE:
BMA1A01 / BMA11A1
DATE:
28 September 2021
TOTAL MARKS:
130
EXAMINER(S):
Ms A Akhalwaya
Mr S Mkwanazi
Ms A Mphahlele
Ms D Telles
MODERATOR:
Dr C Mara
NUMBER OF PAGES:
06
INSTRUCTIONS:

This is an individual assignment and not group work

You must show all calculations for full marks

Use chapter 13 and extra notes including the slides to complete this assignment

You must attend all tutorials so that the tutors can explain and assist where
necessary in order to complete the assignment

Complete the assignment and submit to your tutor via e-mail or WhatsApp before
the due date

5% will be deducted for each day the assignment is late
Income statement
Revenue
Turnover (Sales)
Cost of merchandise sold
Gross profit
Accounts receivables
Daily credit sales
Accounts payable
Credit sales
Operating profit
(Loss)/profit on disposal of property, plant and equipment
Profit before financing costs
Net financing costs
Financial income
Interest paid
Profit before taxation
Profit for the year
Cash flow hedges
Total comprehensive income for the year
Profit attributable to net profit
Equity holder of the parent company
Balance Sheet
ASSETS
Non-current assets
Current assets
Less stock (Inventory)
Cash and cash equivalents
Derivative financial assets
Total assets
EQUITY AND LIABILITIES
Equity (Total capital employed)
Non-current liabilities (long-term)
Employee benefits
Deferred tax liabilities
Operating lease liability
Current liabilities
Ordinary dividends
Shares issued
Dividends per share
Current market price
Total equity and liabilities
2020
R’000
23 285 096
22 070 092
(17 545 318)
4 524 774
10 231 000
82 192
5 270 000
68 493
1 396 039
(9 446)
1 386 593
(57 309)
4 922
(62 231)
1 329 284
954 575
33 238
993 355
954 575
2020
R’000
2 009 163
5 546 775
3 249 914
1 871 616
400 738
7 555 938
2 012 807
308 503
128 035
180 468
5 234 628
119 501
2 754
4 339 c
9 800c
7 555 938
SECTION A:
[75 MARKS]
Instructions: Show all calculations and interpret your answers where necessary
by providing the solutions from the income statement and balance sheet provided
1.
Current Ratio
(5)
2.
Quick Ratio
(7)
3.
Gross Profit Margin
(6)
4.
Net Profit Margin
(6)
5
Dividend per Share and Dividend Yield
6.
Inventory Turnover
(5)
7.
Average Debtors Collection Period (Days)
(5)
8.
Average Payment Period (Days)
(5)
9.
Debt Ratio
10.
Debt Equity Ratio
(6)
11.
Interest Cover Ratio
(5)
12.
Explain the terms “Fixed Costs”, “Variable Costs” and “Total Cost”’
(3)
13.
Explain the term “Financial Management”
(2)
(10)
(10)
SECTION B
INSTRUCTIONS:
[55 MARKS]
SHOW
ALL
CALCULATIONS
AND
INTERPRET
WHERE
NECESSARY
QUESTION 1
[24 MARKS]
Read the scenario below and answer questions 1.1 to 1.7 below
Refer to Tables A1 to A4 at the back of chapter 13
Themba is the owners of a juice manufacturing business, he recently attended a short growth
strategies training course and one of his modules was financial management. He realised that in
order for his business to grow, he must be able to manage his finances correctly. In order for
Themba to pass his training, he has to be able to calculate simple business formulas and interpret
his solution to ensure efficient and effective management of his business finances.
Themba has the following variable (or direct) costs:
Electricity:
R 2 per unit
Ingredients:
R 5 per unit
Labour:
R 1.90 per unit
Fuel:
R 1.10 per unit
Indirect costs include:
Rent:
R 10.000 per month
Security:
R 5.000 per month
Maintenance:
R 3.000 per month
1.1
Calculate Fixed Costs
(4)
1.2
Calculate Variable Costs
(5)
1.3
Calculate Total Costs if he manufactures 1000 units
(3)
1.4
Calculate the break-even in for the following in units and interpret your answer (5)
1.5
Themba wants to invest his money and he wants to earn compound interest on his
investment. He wants to invest R100 in a medium-term investment account.
Calculate what his investment will be in five years-time if the interest rate is at 5%.
(5)
1.6
How much would Themba’s investment be worth in ten years?
1.7
Calculate the Future Value of an investment of R100 over a five year period with
(2)
an interest rate of 10%.
QUESTION 2
(2)
[13 MARKS]
Read the scenario below and answer questions 2.1 and 2.2 below
Sanele takes out a student loan for his first year of business management. The loan agreement
states that the repayment period is equal to 1.5 years for every year of financial assistance
granted that the loan is subject to an interest rate of 10% per annum compounded monthly
2.1
If Sanele pays a monthly instalment of R 1 446.91, calculate the loan amount and
substitute the known values and determine P
2.2
(8)
Determine how much interest Sanele will have paid on his student loan at the end
of 18 months.
QUESTION 3
(5)
[8 MARKS]
Read the scenario below and answer question 3.1 to 3.3 below
At the end of four years, Romeo deposits R500 into an investment account. If the interest rate on
the account is 10% per annum compounded yearly, determine the value of his investment at the
end of 4 years.
3.1
Determine the given information and compound interest formula
(3)
3.2
Draw a table indicating the interest payments and accumulated amounts for each
of the interest payments and accumulated amounts for each of the four years (5)
QUESTION 4
[10 MARKS]
Read the scenario below and answer question 4.1 and 4.2
Use the table below to calculate your answers to calculate investment A and investment
B
Year 0
Year 1
Year 2
Year 3
400 000
Investment
320 000
300 000
A
250 000
120 000
350 000
Investment
275 000
300 000
B
275 000
100 000
Calculate the accounting rate of return for each investment and explain which
option is best suited for Themba’s needs.
END OF ASSESSMENT