Refer to the below information and answer the questions that follow.
STAR Ltd and JELLY Ltd companies are agribusiness firms and operate in the livestock sector.
The two companies have each a division that operate in Siavonga and focus on producing and
selling Fillet and Bream with in the various parts of Zambia through Shoprite chain stores .The
following are summaries of financial statement data for both companies for the year ended March
31, 2020.
STAR Ltd Statement of Financial Position as at March 31 2020
Cash ------------------ K360,000
A/Payable------------K400,000
A/Receivable------- 840,000
N/Payable----------------600,000
Inventory------------- 800,000
Accruals
200,000
Total current assets- 2,000,000
Total Current Liabilities-1200,000
Noncurrent Assets-- 3,200,000
Bonds payable------------600,000
Common stock ( K100 par)
2,400,000
Retained Earnings-------1000,000
Total Assets--------- K5,200,000
Total Liability and Equity
K5,200,000
JELLY Ltd Statement of Financial Position as at March 31 2020
Cash--------.
K366,000
A/Payable------------A/Receivable------- 954,000
N/Payable----------------Inventory------------- 890,000
Accruals
Total current Assets 2,210,000
Total Current LiabilitiesNoncurrent Assets-- 3,510,000
Bonds payable------------Common stock (K 100 par)
Retained Earnings-------Total Assets---------- K5,720,000
Total Liability and Equity
K300,000
350,000
250,000
900,000
500,000
2,300,000
2,020,000
K5,720,000
Income Statement for the period ending March 31, 2020
Sales------------------------------------Operating costs------------------------------Earnings before interest & tax-------------Interest expense------------------------------Earnings before tax -------------------------Tax (35%) -----------------------------------Net income----------------------------------Dividend------------------------------------Additions to Retained Earnings------------
STAR Ltd
$4,500,000
3,200,000
1,300,000
60,000
1,240,000
434,000
806,000
270,000
536,000
JELLY Ltd
5,000,000
3,800,000
1,200,000
75,000
1,125,000
393,750
731,250
240,000
491,250
Required (20 Marks)
A. Conduct a comprehensive business performance analysis using all possible financial ratios.
B. Write a brief commentary report that highlights areas of strength and weakness for each
company relative to one another.