DEPARTMENT OF BUSINESS MANAGEMENT

EBMV301 FINANCIAL MANAGEMENT

TUTORIAL A (TT1) on Moodle via FUNDA platform

DATE: Due by 12 March 2025

(Answers to be uploaded on FUNDA by 20:00 at the latest)
MARKS: 15
LECTURERS: Prof C Rootman, Prof J Krüger & Ms N Maliwa

Assessment conditions

• This is an INDIVIDUAL assessment. You are NOT allowed to discuss this

assessment with any other student.
• You can not use any means, including AI, that could inappropriately help you or
another student with this assessment.
• You can use your learning material to guide you during the completion of this tutorial.
• Normal rules pertaining to tests, assignments and examinations are applicable to this
assessment.
• General Prospectus rule G1.27: “Plagiarism and any instance of an academic
dishonesty will be dealt with the Student Disciplinary Code. Students are referred to
the Policy on Academic Integrity and Prevention of Plagiarism available on the student
portal”.
• Download and/or print the pdf question document of this assessment from
FUNDA. Do the assessment (before or on 12 March 2025). Thereafter, enter your
answers on this assessment’s FUNDA quiz and submit it (before or on 12 March
2025).
• This assessment will close at 20:00 on 12 March 2025 and then it will be
unavailable. As mentioned before, since this is a formative assessment, there are no
tutorial re-assessments.
• You can only attempt this assessment ONCE.
• Only non-programmable calculators may be used. No cell phones may be used as
calculators. No dictionaries may be used.
• Show all units (e.g. R, %, days, etc.). DO NOT leave spaces between units and
numbers, e.g. R123.45, 67.89% except when the units are full words, e.g. 36.27 days.
• If an answer is negative or to indicate a decrease, enter you answer as -R123.45 if
the answer is a monetary value or as -67.89% if the answer is a percentage.
• Please round off your FINAL answers to TWO decimal places (unless otherwise
stated).
• This tutorial covers content relevant to Chapters 1, 3, 4 and 5.

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1 Complete the declaration question.

Declaration: I hereby understand and agree to the assessment conditions. I shall

adhere to the requirements, conditions and rules outlined and referred to above; and I am
aware that transgression of these rules will result in disciplinary action in accordance with
the Nelson Mandela University’s General Prospectus.

A. Yes, I hereby understand and agree to the assessment conditions.

B. No, I will therefore receive a mark of ZERO for this assessment.

2 Indicate your campus.

A. South Campus
B. George Campus

3 Consider the following extract from the 2024 Integrated Annual Report of Woolworths
Holdings limited:

“We have well-defined strategies for each division, and are transitioning our focus
from ‘fixing and repositioning’ to ‘optimising, investing, and growing’ our businesses.
To facilitate this shift, we have increased our level of capital expenditure in our WSA
business, while simultaneously pursuing cost efficiencies to generate the wherewithal
to invest in our new growth initiatives.”
Source:
http://www.woolworthsholdings.co.za/wp-
content/uploads/2024/10/Integrated_Annual_Report_2024.pdf

This extract relates to the financial management decision-making area of

A. working capital.
B. costing.
C. capital structuring.
D. expense planning.
E. capital budgeting.

4 Consider the following information from the 2024 Annual Financial Statements of
Woolworths Holdings Limited.

30 June 2024 30 June 2023

Price Period End (ZARc) 6 178 7 037
Dividend yield 4.3 (30 March 2024)
P/E ratio 21.4 (30 March 2024)
Source: https://www.woolworthsholdings.co.za/wp-content/uploads/2024/09/whlfy24.pdf

Using the information provided, calculate the change in the shareholders’ wealth.

A. Increase of 4.3%
B. Increase of 13.91%
C. Increase of 12.21%
D. Decrease of 13.91%
E. Decrease of 12.21%
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5 Assume that you are currently a shareholder of 20 000 ordinary shares. You are in
the process of buying an additional 20 000 ordinary shares from another shareholder.
This trade of buying the 20 000 ordinary shares from another shareholder will take
place on the _________ market.

A. primary
B. secondary
C. capital
D. money
E. financial

6 Consider the following extract from “Our Chairman’s Report” in the 2024 Integrated
Annual Report of Woolworths Holdings Limited.

“Notwithstanding a disappointing bottom-line performance, the WHL Group

relentlessly continued to drive, and generated, significant economic value. We
maintained our drive of innovation; our capital management and allocation was
exemplary; and we continued to be international leaders in retail industry
sustainability, across various dimensions.”
Source: https://www.woolworthsholdings.co.za/wp-content/uploads/2024/10/Integrated_Annual_
Report_2024.pdf

The extract refers to __________ as one of the Generally Accepted Accounting

Principles (GAAP).

A. accounting entity
B. realisation period
C. conservatism
D. going concern
E. materiality

7 A firm has purchased new equipment, including installation costs, to the value of R3.2
million two years ago. Assume the new equipment has an expected life span of 5
years. Straight-line depreciation is applicable. Calculate the value of the new
equipment today (end of year 2/beginning of year 3) if straight-line depreciation was
used as depreciation method?

A. R640 000
B. R1 280 000
C. R1 920 000
D. R2 560 000
E. R3 200 000

8 The __________ period refers to the period of time covered by a Statement of

Financial Performance.

A. accounting
B. measuring
C. realisation
D. reporting
E. taxation
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9 Which ONE of the following statements is incorrect in terms of users of, and the
purpose for, using financial statements?

A. Shareholders use financial statements to determine the worth of the company as

shareholders provide debt financing.
B. The management of the company uses the financial statements to plan and control
activities to achieve objectives of the company.
C. Labour unions are interested in financial statements when engaging in wage
negotiations with the company.
D. Investment analysts require the financial statements to determine whether the share
price of the company is over-, under- or fairly priced.
E. The financial statements are used by the government to determine whether the
amount of taxes paid is correct.

10. The D/E ratio for a firm is 0.825. What is the Total debt ratio?

A. 17.50%
B. 45.21%
C. 54.48%
D. 82.50%
E. Cannot be determined with the information given

Use the following information of MCQUEEN MOTORS Ltd to answer questions 11 to

13.

STATEMENT OF FINANCIAL PERFORMANCE OF MCQUEEN MOTORS LTD

FOR THE YEAR ENDED 28 FEBRUARY 2025 (Rm)

Sales* 150 000

Cost of goods sold 82 500
Gross profit 67 500
Depreciation 12 350
EBIT 55 150
Interest paid 2 650
EBT 52 500
Tax (27%) 14 175
EAT 38 325

Dividends paid 29 127

Addition to retained earnings 9 198

*80% of Sales are on credit

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 STATEMENT OF FINANCIAL POSITION OF MCQUEEN MOTORS LTD
AT 28 FEBRUARY 2025 (Rm)
ASSETS EQUITY AND LIABILITIES
Non-current assets Shareholders’ equity
Net plant and equipment 76 300 Share capital 59 600
Retained earnings 10 400
Current assets Total equity 70 000
Inventory * 18 550
Accounts receivable 22 500 Non-current liabilities
Cash 10 550 Long-term debt 42 700
Total current assets 51 600
Current liabilities
Short-term debt 8 250
Accounts payable 6 950
Total current liabilities 15 200
Total assets 127 900 Total equity and liabilities 127 900

* Opening inventory = R24 000m

11 Calculate McQueen Motors’ return on investment (ROI) for 2025.

A. 29.96%
B. 40.05%
C. 43.12%
D. 45.27%
E. 52.78%

12 Calculate McQueen Motors’ average collection period (ACP) for 2025.

A. 15.00 days
B. 18.75 days
C. 27.27 days
D. 54.00 days
E. 67.50 days

13 Calculate McQueen Motors’ inventory turnover ratio for 2025.

A. 3.44 days
B. 3.88 days
C. 4.45 days
D. 7.05 days
E. 8.09 days

In addition to the above financial statements, the following information is also available.
Assume that the firm is operating at FULL capacity. The firm has a projected 5% decrease
in sales with costs, all assets and accounts payable being proportional to sales. In addition,
the dividend pay-out remains unchanged. You can use Annexure A to complete the
budgeted/pro forma statements for 2026 to assist in answering multiple choice questions 14
to 17. Round to the nearest Rand value.

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14 Calculate the amount (to nearest Rand) of net plant and equipment when there is a
5% decrease in sales.

A. R68 670m
B. R72 485m
C. R76 300m
D. R80 115m
E. R83 930m

15 Calculate the amount of short-term debt when there is a 5% decrease in sales.

A. R7 425m
B. R7 838m
C. R8 250m
D. R8 663m
E. R9 075m

16 Calculate the amount for retained earnings (to the nearest Rand), when there is a 5%
decrease in sales, that will be recorded in the 2026 budgeted/pro forma statement of
financial position.

A. R7 607m
B. R9 198m
C. R10 400m
D. R19 007m
E. R19 598m

17 If McQueen Motors was operating at 80% capacity and NOT at full capacity, calculate
the amount (to nearest Rand) of net plant and equipment when there is a 5% decrease
in sales. Use four decimal places in your workings.

A. R57 983m
B. R61 040m
C. R76 300m
D. R150 000m
E. R187 500m

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 Annexure A

NOTE: ROUND TO THE NEAREST RAND VALUE.

BUDGETED/PRO FORMA STATEMENT OF FINANCIAL PERFORMANCE OF

MCQUEEN MOTORS LTD FOR THE YEAR ENDED 28 FEBRUARY 2026 (Rm)

Sales
Cost of goods sold
Gross profit
Depreciation
EBIT
Interest paid
EBT
Tax (27%)
EAT

Dividends paid
Addition to retained earnings

BUDGETED/PRO FORMA STATEMENT OF FINANCIAL POSITION OF

MCQUEEN MOTORS LTD AT 28 FEBRUARY 2026 (Rm)
ASSETS EQUITY AND LIABILITIES
Non-current assets Shareholders’ equity
Net plant and equipment Share capital
Retained earnings
Current assets Total equity
Inventory *
Accounts receivable Non-current liabilities
Cash Long-term debt
Total current assets
Current liabilities
Short-term debt
Accounts payable
Total current liabilities
Total assets Total equity and liabilities

-END OF EBMV301 2025 TUTORIAL A QUESTIONS-

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