Financial Analysis Exercise

1) MOLOCAM is a public limited company located in Bafut and it is specialized in the purchase and
sale of goods A.
MOLOCAM was set up on July 11, 2013 with a capital of 5,000 shares of 16,500FCFA each. On
December 31, 2015, MOLOCAM decided to study its financial situation and the following information
was provided to you:
 Balance sheet on December 31, 2015 ( see appendix 1)

 The estimated value of building is 69,000,000 cfaf
 The depreciation of equipment should increase by 3,000,000 CFAF
 The long term securities represent shares purchased at 25,000CFAF each from a company with
a capital made up of 3,000 shares and whose Net Asset is worth 84,000,000CFAF.
 None commercial loans for 3,000,000CFAF will be paid within a year
 The security stock of goods amounts to 5,000,000CFAF
 Bills receivable of an amount of 6,000,000CFAF can be easily discounted
 Short term securities of an amount of 2,000,000CFAF are not easily marketable
 The Net result for the period was appropriated as follows:
 Statutory Reserves: 8,000,000CFAF
 Optional Reserves: 7,000,000CFAF
 Carried forward: 4,500,000CFAF
 The balance as dividend
 Suppliers of equipment for an amount of 3,000,000CFAF will be paid in 2006
 The stock of goods on January 1, 2005 worth is 22,500,000CFAF
 The total purchase of good (VAT excluded) for 2005 is worth 89,000,000CFAF
 The total sales of good (VAT excluded) for 2005 is worth 120,000,000CFAF
 The VAT is 19.25%
Work required:
1.1) Prepare the condensed financial balance sheet

1.2) Calculate the working capital
1.3) Calculate the Needs in working capital
1.4) Calculate the Net Treasury
1.5) Calculate the turnover ratio (rotation duration)
FINANCIAL ANALYSIS BY KUM Boris KPWE (670890570/693158008) 15 | P a g e

1.6) Calculate the supplier-credit duration
1.7) Calculate the customer –credit duration
1.8) What do you think about the financial situation of MOLOCAM on December 31, 2015?
APPENDIX 1: Balance sheet of MOLOCAM Company on December 31, 2015
ASSETS LIABILITIES
HEADINGS GROSS DEP.PR NET LIABILITIES AMOUN
OV T
Capital 82,500,00
0
Land 46,000,00 9,000,00 37,000,00 Legal reserves 16,000,00
0 0 0 0
Buildings 83,000,00 18,000,0 65,000,00 Statutory reserves 15,000,00
0 00 0 0
Equipment 87,000,00 28,000,0 59,000,00 Optional reserves 19,750,00
0 00 0 0
Non commercial Loan 12,000,00 / 12,000,00 Brought forward 5,000,000
0 0
Accrued interest on comm.. 1,500,000 / 1,500,000 Net profit for the period 25,000,00
Loan 0
Long term securities 16,000,00 / 16,000,00 Long & med. Term 33,200,00
0 0 borrowing 0
Deposit and guarantee 5,000,000 / 5,000,000 Provisions for risk and 24,000,00
expenses 0
Goods 36,500,00 4,000,00 32,500,00 Suppliers of equipment 28,900,00
0 0 0 0
Other supplies 18,700,00 / 18,700,00 Suppliers 36,250,00
0 0 0
Customers 50,000,00 6,500,00 43,500,00 Personnel 9,500,000
0 0 0
Sundry debtors 12,500,00 / 12,500,00 Operating provisioned risk 12,500,00
0 0 & dep 0

Short terms securities 7,500,000 / 7,500,000 Bank, cash advances 15,800,00
0
Banks 42,500,00 / 42,500,00 Bank unmatured discounted 38,300,00
0 0 bills 0
Cash in hand 9,000,000 / 9,000,000
TOTAL 427,200,0 / 361,700,0 TOTAL 361,700,0
00 00 00
2) You are given the balance sheet of CIMARA enterprise as at 31/12/N below.
ASSETS AMOUNT LIABILITIES AMOUNT
Social capital 25,000,000
Land 28,000,000 Reserves 4,000,000
Buildings 13,000,000 Brought forward (1,280,000)
Equipments 4,800,000 Result 3,440,000
Stocks 8,000,000 Borrowings 4,800,000
Customers 4,200,000 Provision for risk 3,000,000
Customers bills receivable 1,800,000 Suppliers 8,500,000
Bank 3,500,000 Personnel 9,000,000
Head office cash 6,000,000 State ------------
Overdraft ------------
TOTAL ------------- TOTAL

-------------
-
The information below is available is available for the financial analysis of the enterprise:
 The actual value of land is 32,000,000CFAF
 20% of the stocks represents value of the security stock
 The value for equipment has been obtained from the application of digressive depreciation
method instead of constant method. All the equipments were acquired on 01/07/N-1 and the life
span is 5 years. The actual value for equipment represents 110% of its normal net accounting
value.
 The ceiling for discounting of the customers bills at bank is fixed at 1,000,000CFAF

 Only 70% of the value for provisions is justified
 The results will be shared early march as follows: 60% for reserves and 40% for dividends.
 The borrowings are credits obtained at the beginning of the year N-1, from a Njangi group
repayable quarterly without interest in 5 years. However, the 4th reimbursement of N was
already been settled.
 The actual value for personnel is 7,200,000CFAF.
Work required:
a) Calculate the missing values on the balance sheet above, knowing that state and overdraft are
proportional to 6 and 4 respectively
b) Give the limitations of an accounting balance sheet
c) State the difference between an accounting balance sheet and a financial balance sheet
d) Present a condensed financial balance sheet of CIMARA enterprise as at 31/12/N
e) With the help of at least 4 ratios of your choice, what advice will you give to the management of
this enterprise

Financial Analysis Exercise

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1) MOLOCAM is a public limited company located in Bafut and it is specialized in the purchase and

 Balance sheet on December 31, 2015 ( see appendix 1)

1.1) Prepare the condensed financial balance sheet

FINANCIAL ANALYSIS BY KUM Boris KPWE (670890570/693158008) 15 | P a g e

APPENDIX 1: Balance sheet of MOLOCAM Company on December 31, 2015

FINANCIAL ANALYSIS BY KUM Boris KPWE (670890570/693158008) 16 | P a g e

TOTAL ------------- TOTAL

FINANCIAL ANALYSIS BY KUM Boris KPWE (670890570/693158008) 17 | P a g e

FINANCIAL ANALYSIS BY KUM Boris KPWE (670890570/693158008) 18 | P a g e

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