You have recently been employed as a young Finance Director of Cloud 9 Ltd which is in the production offarm equipment and as part of the company's annual exercise to review the growth of the company, you areexpected to write a recommendation letter to advise Managing Director and entire management on the futureof the business operations. The financials below are to assist you in the best possible way with critical analyticaltools to make an informed suggestion to the team.CLOUD 9 LTDSTATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED DECEMBER 31202020192018Turnover373,578424,486456,300Cost of sales(253,604)(254,210)(198,900)Gross profit119,974170,276257,400Impairment of financial assets(2,477)(1,800)Distribution costs(87,036)(91,309)Administrative expenses(32,556)(50,656)Other operating income2,36910,039Operating profit27436,550Finance income2,5944,949Finance costs(2,069)(2,765)Profit before income tax79938,734Income tax expense(285)(13,718)Profit for the year51425,016Other comprehensive incomeTotal comprehensive income51425,016Table 1 Source (Author, 2022)CLOUD 9 LTDSTATEMENT OF FINANCIAL POSITION AS AT DECEMBER 3120202019Non-current assetsProperty, plant and equipment178,315187,380Right-of-use assets2,7933,726Intangible assets1,426867182,534191,973(5,400)(96,100)(67,200)3,50092,2007,200(3,400)96,000(15,450)80,55080,5502018197,0004,5001,200202,700 Current assetsInventories94,37296,60699,500100,61247,02475,000Trade and other receivablesCurrent income tax assets4,7131,1843,200Cash and cash equivalents54,02139,03246,950253,718183,846224,650TOTAL ASSETS436,252375,819427,350EQUITY AND LIABILITYStated capital10,00010,00010,000Retained earnings250,105249,591270,200260,105259,591280,200LiabilitiesNon-current liabilities:Deferred tax liabilities9,34911,29510,0502841,2223,400Employee benefit obligationsLease liabilities1,8333,7175,00011,46616,23418,450Current liabilities:Lease liabilities7134251,05039168500Employee benefit obligationsTrade and other payablesDividend payable160,92396,363105,0003,0063,0383.700164,68199,994110,250Total liabilities176,147116,228128,700TOTAL EQUITY AND LIABILITIES436,252375,819427,350Table 2 Source (Author, 2022)Required:a) Highlight and analyze the statement of comprehensive income of Cloud 9 Ltd using the horizontaltechnique to advise management on their new future business operation.DC: ACD01-F004

Horizontal analysis is the line by line change analysis of the financial statement of an company. In…

You have recently been employed as a young Finance Director of Cloud 9 Ltd which is in the production farm equipment and as part of the company's annual exercise to review the growth of the company, you ar expected to write a recommendation letter to advise Managing Director and entire management on the futur of the business operations. The financials below are to assist you in the best possible way with critical analytica tools to make an informed suggestion to the team. CLOUD 9 LTD STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED DECEMBER 31 2020 2019 2018 Turnover 373,578 424,486 456,300 Cost of sales (253,604) (254,210) (198,900) Gross profit 119,974 170,276 257,400 Impairment of financial assets (2,477) (1,800) (5,400) Distribution costs (87,036) (91,309) (96,100) Administrative expenses (32,556) (50,656) (67,200) Other operating income 2.369 10,039 3.500 Operating profit 274 36,550 92,200 Finance income 2,594 4,949 7,200 Finance costs (2,069) (2.765) (3,400) Profit before income tax 799 38,734 96,000 Income tax expense (285) (13,718) (15,450) Profit for the year 514 25,016 80,550 Other comprehensive income Total comprehensive income 514 25,016 80,550 Table 1 Source (Author, 2022)

You have recently been employed as a young Finance Director of Cloud 9 Ltd which is in the production farm equipment and as part of the company's annual exercise to review the growth of the company, you ar expected to write a recommendation letter to advise Managing Director and entire management on the futur of the business operations. The financials below are to assist you in the best possible way with critical analytica tools to make an informed suggestion to the team. CLOUD 9 LTD STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED DECEMBER 31 2020 2019 2018 Turnover 373,578 424,486 456,300 Cost of sales (253,604) (254,210) (198,900) Gross profit 119,974 170,276 257,400 Impairment of financial assets (2,477) (1,800) (5,400) Distribution costs (87,036) (91,309) (96,100) Administrative expenses (32,556) (50,656) (67,200) Other operating income 2.369 10,039 3.500 Operating profit 274 36,550 92,200 Finance income 2,594 4,949 7,200 Finance costs (2,069) (2.765) (3,400) Profit before income tax 799 38,734 96,000 Income tax expense (285) (13,718) (15,450) Profit for the year 514 25,016 80,550 Other comprehensive income Total comprehensive income 514 25,016 80,550 Table 1 Source (Author, 2022)

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter1: Introduction To Managerial Accounting

Section: Chapter Questions

Problem 3TIF: Communication Todd Johnson is the Vice President of Finance for Boz Zeppelin Industries Inc. At a...

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Todd Johnson is the vice president of Finance for Boz Zeppelin Industries, Inc. At a recent finance meeting, Todd made the following statement: “The managers of a company should use the same information as the shareholders of the firm. When managers use the same information to guide their internal operations as shareholders use in evaluating their investments, the managers will be aligned with the stockholders’ profit objectives.” Prepare a one-half page memo to Todd discussing any concerns you might have with his statement.
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