Sharpkop

Analysis and interpretation

35 marks in our Paper 1 questions. 9 questions from 2024.

Practise this topic, marked

This topic asks you to read financial indicators and comment on them: expense ratios, return on equity, earnings per share, gearing and what they mean for shareholders. The 9 questions here are worth 35 marks in the November 2024 Paper 1 set. Of the 35 marks, 12 are for reading data from diagrams, tables and graphs, 9 for explaining, 7 for the correct final answer, 5 for method and working and 2 for recalling facts and terms. Quote the figure and the trend, then comment on what they mean.

The 2024 Diagnostic Report says candidates quoted indicators without the trend and the figures, and read the mark-up percentage as expense control when it shows pricing policy. A figure and a trend were given with no comment on what it means for shareholders, so the explanation marks were lost. Trends were also misjudged: a lower debt-equity ratio means lower risk, and a return above the loan interest rate shows positive gearing. Use the pattern figure, trend, meaning.

Where marks are lost: in our words, from Department of Basic Education, NSC 2024 Diagnostic Report, Part 1 (Book 1).

Questions

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Calculate the operating expenses as a percentage of sales for the year ended 31 August 2024.
(3)Based on Nov 2024 · Paper 1 · Q2.3.1
Calculate the stock turnover rate of Lindani Traders for the year ended 28 February 2025. Show your workings and give the answer as a number of times, correct to one decimal place where necessary.
(4)Based on Nov 2024 · Paper 1 · Q2.3.2
Calculate the interim dividend per share, in cents, for the year ended 31 August 2025.
(3)Based on Nov 2024 · Paper 1 · Q2.3.3
Give TWO indicators from the profitability information that show Kopano Ltd is keeping its costs under control. Support each with the actual percentages and say in which direction each one moved.
(4)Based on Nov 2024 · Paper 1 · Q3.1
Comment on the change in the company’s dividend pay-out policy between the two years. Explain why this change is a responsible decision. Give ONE point in your explanation.
(3)Based on Nov 2024 · Paper 1 · Q3.2
Comment on whether the shareholders of Karoo Fresh Ltd should be satisfied with the earnings per share (EPS) and the return on average shareholders’ equity (ROSHE) for the current year. Support your comment by quoting TWO financial indicators with figures.
(4)Based on Nov 2024 · Paper 1 · Q3.3
The directors of Lumka Traders Ltd bought additional fixed assets during the 2025 financial year. Use the extracted figures in the information block to identify the TWO main sources of finance (each with an increase of more than R1 000 000) that were used for this purchase. For each source, state the source and give the figures (the opening and closing amounts and the change).
(4)Based on Nov 2024 · Paper 1 · Q3.4.1
The directors of Mkhize Traders Ltd bought extra equipment during 2024 and paid for part of it with a new loan. Using the information provided, explain how this decision changed the company’s financial risk and its gearing. Support your answer with TWO different indicators, and quote the figures for each.
(6)Based on Nov 2024 · Paper 1 · Q3.4.2
The shareholders are pleased with the work of the CEO. Apart from the points already made about profit and dividends, identify and explain TWO other points from the indicators that show the company is well managed by the CEO. Quote figures.
(4)Based on Nov 2024 · Paper 1 · Q3.6.2

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