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Q.2.1

For sales to increase within a company, there needs to be an increase in the demand for their product(s).

Discuss five (5) ways in which companies can ensure increased demand for their product(s).

Q.2.2

Ngotso Enterprises incurred the following income and expenses for the year ending 28 February 2019:

required :

Assume Ngotso Enterprises were to introduce the following measures for the following financial year ending 28 February 2020:

Increase net sales revenue by 8%;

Decrease cost of sales by 7%;

Increase interest received by 5%;

Decrease operating expenses by 2%, except for Wages & Salaries which

increase by 6%;

Interest payments to stay constant.

Prepare a budgeted statement of comprehensive income for the financial year ended 28 February 2020 based on the above information.

Q.2.3

Use the information in Q.2.2 for the financial year ending 28 February 2019, and calculate the Gross Profit percentage for Ngotso Enterprises.

Show the formula and all workings. Round off to two (2) decimals. (4)

(

Q.2.4

Use the information in Q.2.2 for the financial year ending 28 February 2019, and calculate the Average Debtors Collection period if Ngotso Enterprises average trade debtors were R60 000 at year-end and 60% of their sales are done on credit.

Show the formula and all workings. Round off to the nearest day. (4)

Q.2.5

Use the information given in Q.2.2 for the financial year ending 28 February 2019, and calculate the Average Creditors Settlement Period if Ngotso Enterprises average creditors were R40 000 at year-end and 50% of their purchase are done on credit. Purchases are equal to cost of sales.

Show the formula and all workings. Round off to the nearest day. (4)

2.6

The financial manager of Ngotso Enterprises would like to calculate the debt to equity ratio for the entity. Explain this ratio to him. Your explanation should include reference to how it is calculated as well what is measured by this ratio. (5)

2 800 18 000 400 000 Interest on overdraft Equipment expenses Sales Advertising Insurance Water and electricity 60 000 3 000 3500 Required: Assume Ngotso Enterprises were to introduce the following measures for the following financial year ending 28 February 2020: Increase net sales revenue by 8% Decrease cost of sales by 7% Increase interest received by 5%. Decrease operating expenses by 2%, except for Wages & Salaries which increase by 6%; Interest payments to stay constant Prepare a budgeted statement of comprehensive income for the financial year ended 28 February 2020 based on the above information 2.2.3 Use the information in 2.2.2 for the financial year ending 28 February 2019, and (4) calculate the Gross Profit percentage for Ngotso Enterprises, Show the formula and all workings. Round off to two (2) decimals. 0.24 Use the information in 2.2.2 for the financial year ending 28 February 2019, and (4) calculate the Average Debtor's Collection period if Ngotso Enterprises average trade debtors were R60 000 a year-end and 60% of their sales are done on credit Show the formula and all workings. Round off to the nearest day. 2.2.5 Use the information given in 2.2.2 for the financial year ending 28 February 2019. (4) and calculate the average creditor's Settlement Period of Ngotso Enterprises average creditor's were Rap 000 at year end and So% of their purchase are done on credit. Purchases are equal to cost of sales Show the formula and all workines. Round off to the nearest day The inte fucation 2015 2019 Q.2.6 The financial manager of Ngotso Enterprises would like to calculate the debt to (5) equity ratio for the entity. Explain this ratio to him. Your explanation should include reference to how it is calculated as well what is measured by this ratio. END OF PAPER The Independente di 2019 Question 2 (Marks: 40) Q.2.1 For sales to increase within a company, there needs to be an increase in the demand (5) for their product(s). Discuss five (5) ways in which companies can ensure increased demand for their product(s). Q.2.2 Ngotso Enterprises incurred the following income and expenses for the year ending (18) 28 February 2019: R Wages and salaries 110 000 Sales returns 15 000 Interest on savings account 2 500 Packing materials 25 000 Rent paid 10 000 Cost of sales 280 000 Stationery 1 800

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