GROUP PROJECT
Requirements:
1. This is a group project.
2. The project is worth 20% of your course grade.
3. The project has two (2) questions.
4. Start the response to each question on a new page.
5. Label all responses (parts) appropriately
6. Place the ID number of each group member on the cover page of the
project
7. The project is to be typed written and submitted in PDF.
8. Use font style Times New Roman
9. Use font size 12.
10. The due date is November 5, 2023 at 11:55PM.
11. Projects MUST be submitted via the Moodle Container. Emailed
projects will attract a zero (0) mark.
12. SHOW ALL WORKINGS! Failure to show workings will result
in zero (0) mark!!!
1
QUESTION 1 - RATIO ANALYSIS: (Total Marks 10)
Complete the Statement of Financial Position and the sales information in
the table that follows for JAYDz Industries using the following financial
data.
NB. All sales are on credit.
Debt ratio:
60%
Current ratio
1.8 times
Total assets turnover
1.5 times
Accounts receivable turnover
10 times
Gross profit margin on sales
25%
Inventory turnover ratio
5 times
2
Statement of Financial Position
ASSETS
Non-current assets
$000
?
Total non-current assets
Current assets
?
Inventories
Accounts receivable
Cash
Total current assets
?
?
?
?
TOTAL ASSETS
750,000
CAPITAL & LIABILITIES
Capital & reserves
Ordinary shares
Retained earnings
Total capital & reserves
?
243,750
?
Non-current liabilities
Long-term loan
Total non-current liabilities
150,000
150,000
Current liabilities
Accounts payable
Total current liabilities
?
?
TOTAL CAPITAL & LIABILITIES
?
Sales
Cost of sales
?
?
3
QUESTION 2:
RISKS & RETURNS (TOTAL MARKS 10)
Jennifer, a close family friend has approached you to help her determine which of the
two common stocks she should invest in.
Proven Limited
Scotia Investment
Probability
Return
Probability Return
0.125
18.5%
0.20
-15%
0.350
9.75%
0.20
16%
0.525
36.0%
0.30
17%
0.30
-8%
Required:
a) Calculate the expected returns of the Proven Limited Stock
(2.5 marks)
b) Determine the risk (standard deviation) and return of the Proven Limited
Stock
(0.5 mark)
c) Calculate the expected returns of stock the Scotia Investment
(3 marks)
d) Determine the risk (standard deviation) and return of the Scotia Investment
(0.5 mark)
e) Which of the two stock would you invest in?
(0.5 mark)
f) Your friend Jennifer, has decided that she will invest an additional $100,000
of her savings in the following stocks:
Company
Company A
Percentage of
investment
55%
Expected rate
of return
15%
Company B
25%
30%
Company C
20%
-4%
Required:
What rate of return should your friend Jenifer expects to receive on her
portfolio?
(3 marks)
4