Pokea Cellphone Operators Ltd. started operations on 1 September 2002. The company raised the required equity capital of Sh.65 million and debt at an annual rate of interest of 18% before commencing business. Given below are some statistics extracted from the books of the company in respect of the financial statements prepared to 31 August 2003.
Eighty percent (80%) of the sales were on credit. The current assets on 31 August 2003 consisted of only stock, debtors and cash and bank balances as given above, while current liabilities consisted of only creditors and tax provided for in respect of the year to 31 August 2003. Taxation was provided for at the rate of 30%.
You are also provided with the following ratios which have been determined from the financial statements of Pokea Cellphone Operators Ltd.
(a) In respect of the year ended 31 August 2003, you are required to prepare the company‟s:
(i) Trading profit and loss account.
(ii) Balance sheet.
(b) The following statistics have been provided with respect to the industry in which the company operates:
Comment on the performance of the company relative to these industry statistics.