Accounting Grade 12 Limpopo March 2023 Paper & Memo

LIMPOPO PROVINCIAL GOVERNMENT REPUBLIC OF SOUTH AFRICA DEPARTMENT OF EDUGATION NATIONAL SENIOR CERTIFICATE DATE OF ADMINISTRATION : 17 MARCH 2023 DURATION : 1,5 HOUR MARKS : 100 This question paper consists of 9 pages, a formula sheet and a 7-page answer book.

accdowimeadedcsfirom Stanmorephysics.com Limpopo/DoE. NSC INSTRUCTIONS AND INFORMATION Read the following instructions carefully and follow them precisely. de Answer ALL the questions. 2: A speciaLANSWER BOOK is provided in which to answer ALL the questions. 3. Show-workings in order to achieve part-marks. 4. You may use a non-programmable calculator. 5. You may use a dark pencil or blue/black ink to answer the questions. 6. Where appropriate, calculations must be done to one decimal point. 1 Use the information in the table below as a guide when answering the question paper. Try NOT to deviate from it. QUESTION 1: 48 marks; 43 minutes Topic of the question: This question integrates: Financial accounting Income Statement and Audit report Financial Statements: Income statement, Notes and Audit report QUESTION 2: 30 marks; 27 minutes Topic of the question: This question integrates: Financial accounting Cash Flow Statement Financial Indicators Cash Flow Statement and Financial Indicators QUESTION 3: 22 marks; 20 minutes Topic of the question: This question integrates: Financial Accounting Analysis and interpretation! Concepts of Financial Statement Interpretation of Financial Information Copyright reserved

Downloaded from ie Sica com Accounting Controlled test 1 Limpopo/DoE. nee QUESTION1 INCOME STATEMENT AND AUDIT REPORT (48 marks; 43 minutes) MALEKA LTD The information below relates to Maleka LTD. The financial year ended on 28 February 2022. REQUIRED: 1.1 Complete the statement of Comprehensive Income (Income Statement) for year (40) ended 28 February 2022. INFORMATION. Extract from the Pre — Adjustment Trial Balance on 28 February 2022. Balance Sheet Accounts Section Debit Credit Ordinary share capital 2 496 000 Retained income (1 February 2022) 1 480 000 Loan : FNB Bank 1 470 000 Land and Buildings 3 000 000 Vehicle at cost 800 000 Equipment at cost 200 000 Accumulated depreciation on vehicles 680 000 Accumulated depreciation on equipment 37 000 Fixed deposit: Capitec Bank 1 186 000 Creditors control 97 500 Debtors Control 186 000 Trading stock 1 050 300 Bank 42 550 SARS (income tax) 500 000 Provision for bad debts 3 240 Consumable on hand ( Packing material-1 820 March 2021) Nominal Accounts Section Sales 8 800 000 Cost of sales ? Debtors allowance 19 200 Directors fees 550 000 Audit fees 188 410 Salaries and wages 681 600 Rent income 70 500 Interest on fixed deposit 80 000 Interest on loan ? Advertising 60 000. Insurance 14 700 Bad debts 6 730 Packing material 15 000 Sundry expenses ? Ordinary share dividends ?

Accoupiayanoddest From Stanmorephysics.com _Limpopo/Doe. NSC ADJUSTMENTS AND ADDITIONAL INFORMATION. A. The business prices its goods at a mark-up of 60% on cost. Trade discount of R360 000 was allowed on invoices to certain customers. B. A creditnote for R49 600 issued to a debtor, dated 25 February 2022, was recordedras an invoice. C. A debtor. P.Malan, with outstanding balance of R42 000, has left the country. His account must be written off. D. The provision for bad debts must be adjusted to 5% of the outstanding debtors. E. The physical stocktaking on 28 February 2022 reflected the following stock on hand: e Trading stock R1 002 000 e Packing material R 6 020 F. One employee received a double salary by mistake from Salary Journal for February 2022. This must be reversed. The employee made a direct deposit to the business account as a refund on 28 February 2022. His normal salary details are as follows: Deductions Employers Net salary contribution PAYE Pension Pension R3 000 R2 000 R4 000 R15 000 Employer’s contributions are part of salaries and wages account. G. Advertising of R40 000 consists of a month to month contract with local radio station. Advertising was paid for 13 months. From 1 November 2021, the contract rate was decreased by10%. H. Make provision for depreciation as follows: e Onvehicles at 15% p.a on cost price. e On equipment at 10% p.a on diminishing balance. NOTE: A new computer was purchased on credit on 1 June 2021 for R60 000. This has already been recorded. Copyright reserved Please turnover

Downloaded from ih Li lca com Accounting Controlled test 1 Limpopo/DoE. ee |. Share Capital: Authorised share capital consists of 1000 000 ordinary shares. 600 000 shares were issued on 1 March 2021 200 000 new ordinary shares were issued 0 1 September 2021. 400 000 ordinary shares were repurchased on 1 February 2022 at R1.40 above the average issue price R4.52) The transaction was properly recorded). J. Dividends: Interim dividends of 30 cents per share was paid on 30 August 2021 Final dividends of 40 cents per share was declared on 28 February 2022. Shares bought back on 1 February 2022 also qualify for the final dividends. K. Operating profit is 15% on turnover. L. Income tax for the financial year was calculated as R360 000. This is 30% of the net profit before tax. 1.2 Audit report You are provided with an extract from the audit report of the independent auditors of Cooper Ltd. Read the report and answer the questions that follow. Point 1 Point 2 Point 3 To Shareholders We have audited the annual financial statements of Cooper Limited for the year ended 30 June 2012, set out on pages 25 to 51..... Basis for Opinion An amount that was shown as additions to Land and buildings was for revaluations of the Buildings. No audit evidence was provided. Opinion In our opinion, the financial statements fairly present the financial position of the company at 30 June 2022, except for the increase in the value of the fixed assets in the Balance Sheet.

Accouiayanoddest From Stanmorephysics.com _Limpopo/Doe. NSC REQUIRED: 1.2.1 Explain why the auditors did specifically address the report to shareholders? 1.2.2 Referito point 1. Explain why the independent auditors referred to pages 25-51 in the report. 1.2.3 Refer to point 2. The directors claimed that the value of the buildings increased over the years and that the value must be increased and shown as additions in the fixed asset note. As the independent auditor, what advice would you give? Provide ONE point. 1.2.4 Refer to point 3. e The company received a/an (unqualified/qualified/disclaimer) audit report. e Give a reason for your answer. (2) (2) (2) (1) () Copyright reserved Please turnover

Downloaded from PEERED EELS com Accounting Controlled test 1 nice Limpopo/DoE. QUESTION 2 (30 marks; 27 minutes) CASH FLOW STATEMENT AND FINANCIAL INDICATORS You are provided with information relating to Maboneng Limited. The financial year- end is on 31 October 2022. New shares were issued on the first day of the financial year REQUIRED: 2.1 What is the main purpose of a Cash Flow Statement? INFORMATION: (2) 2.2 Complete the Cash Flow Statement for the year ended 31 October 2022. Show (21) ALL workings in brackets 2.3. Calculate the following financial indicators on 31 October 2022: e % Gross profit on sales (2) ¢ Acid-test ratio (3) e Debt-equity ratio (2) A. The following information was extracted from the Income Statement for the year ended 31 October 2022: Sales 1 750 000 Cost of Sales (800 000) Gross Profit 950 000 Interest on loan (all capitalised) 175 500 Income tax 375 000 Net profit after tax 975 000 B. Information extracted from the Balance Sheet on 31 October: 2022 2021 Current assets 4 804 000 2 820 000 Inventories 1 437 500 1 656 250 Trade and other receivables (see D) 1075 000 956 250 Cash and cash equivalents 2 291 500 207 500 Ordinary shareholders' equity 4 450 000 4000 000 Ordinary share capital (see F) 3 450 000 3 150 000 Retained income 1 000 000: 850 000 Loan: Freeport Bank (12% p.a.) 2 000 000 1 375 000 Current liabilities 1 450 000 1 262 500 Trade and other payables (see E) 1 450 000 1 262 500

Accoupoymalodtdest From Stanmorephysics.com _Limpopo/Doe. NSC C. Fixed/Tangible assets note: Land and hicl P buildings Vehicles Equipment Carrying value at beginning of 3000000] 660.000 157 500 financial year ‘Cost 3 000 000 900 000 210 000 Accumulated depreciation (e) (240 000) (52 500) Movements Additions at cost 0 0 48 000 Disposals at carrying value 500 000 82 000 0 Depreciation 0 132 000 (55 500) Carrying value at end of 2500000} 446000] 150000 financial year Cost 2 500 000 750 000 258 000 Accumulated depreciation 0 (304 000) (108 000) Additional information in respect of fixed assets: * A vehicle was sold at its carrying value on the LAST day of the financial year. Depreciation is written off on vehicles at 20% p.a. on the diminishing-balance method. * Land and buildings were sold at cost during the financial year. D. Trade and other receivables include: 31 October 31 October 2022 2021 SARS: Income tax R22 500 0 E. Trade and other payables include: 31 October 31 October 2022 2021 SARS: Income tax fe) R27 500 Shareholders for dividends R450 000 R385 000 F. Details of ordinary share capital: * Ordinary share capital at the beginning of the 2022 financial year consisted of 700 000 ordinary shares with a total value of R3 150 000. * On 1 November 2021, 50 000 additional shares were issuedyat R6,00 each. * There were no further changes to share capital. G. The dividends (interim and final) for the financial year ended 34-October 2022 amounted to R825 000. Copyright reserved Please turnover

Downloaded from ie a sla com Accounting Controlled test 1 Limpopo/DoE. Nee QUESTION 3 INTERPRETATION OF FINANCIAL INFORMATION (22 marks; 20 minutes) MACHETE LIMITED You are provided with information from Machete Limited. The company is registered with authorised Share Capital of 2 000 000 shares. 60% of this shares were already issued. REQUIRED: 3.1 The CEO, Nick Petje, currently owns 40% of the issued shares. The directors of the company decided to issue 50% of the unissued shares in July 2022. 3.1.1 Calculate the minimum number of shares that Nick must purchase in July 2022 to become the majority shareholder (3) 3.1.2 Nick wants to purchase the additional shares at R6 per share without Advertising the shares to the public. Give TWO reasons why you would not approve this arrangement. (4) 3.2 The directors are proposing that the business operations be expanded in the New financial year. One of the directors suggested that they finance the expansions by taking a loan of R1 000 000, instead of issuing new shares to the public. Quote and explain TWO financial indicators to support his Opinion. (6) 3.3 Bongani is a shareholder in Machete Limited. He owns 32 000 shares which he purchased two years ago at R4,75 each. 3.3.1 Calculate the amount of dividends Bongani would earn for the financial year ending 31 October 2022. (2) 3.3.2. Should Bongani be satisfied with the dividend policy of Machete Limited? Quote and explain relevant financial indicators to support your answer. (3) 3.3.3 Bongani wants to sell his shares in Machete Limited and invest his funds in an alternative investment. You disagree with him. Quote and explain ONE relevant financial indicator, other than dividends, to discourage him from selling his shares. (4)

Accopoymnioadedt From Stanmorephysics.com Limpopo/DoE. NSC INFORMATION: Financial indicators for the past two financial years ending October: 2022 2021 Current;ratio 3,10:1 2,23 1 Acid-testfatio 0,321 09254 Average debtors collection period 35 days 28 days Average Creditors payment period 65 days 90 days Earnings per share 130 cents 94 cents Dividends per share 110 cents 75 cents Return on average shareholders’ equity 24,1% 15% Debt-equity ratio 0,44:1 0,34:1 Return on average capital employed 26% 18% Net asset value per share 593 cents 571 cents Prices of Machete Ltd shares on the JSE 950 cents 725 cents Interest on fixed deposit 6,5% 6,5% Interest rate on loans 13% 13% TOTAL 100 MARKS Copyright reserved Please turnover

Downloaded from i A Seca com Accounting Controlled test 1 ice Limpopo/DoE. GRADE 12 ACCOUNTING FINANCIAL INDICATOR FORMULA SHEET Gross _profit x 100 Sales 1 Gross _ profit x 100 Cost of sales 1 Net profit before tax x 100 Sales 1 Net profit after tax x 100 Sales al. Operating expenses x 100 Sales al Operating profit x 100 Sales 1 Total assets : Total liabilities Current assets : Current liabilities (Current assets — Inventories) : Current liabilities Non-current liabilities : Shareholders' equity (Trade & other receivables + Cash & cash equivalents) : Current liabilities Average trading stock x 365 Cost of sales 1 Cost of sales Average trading stock Average debtors x 365 Average creditors x 365 Credit sales 1 Cost of sales 1 , Net income aftertax x 100 Net income after tax 2100 Number of issued shares 1 Average shareholders’ equity al (*See note below) Net income before tax + Interest on loans x 100 Average shareholders’ equity + Average non-current liabilities 1 Shareholders' equity x 100 Dividends forthe year x 100 Number of issued shares 1 Number of issued shares 1 Interim dividends x 100 Final dividends x 100 Number of issued shares 1 Number of issued shares 1 Dividends per share x 100 Earnings per share 1 Dividends forthe year x 100 Net income. after tax 1 Total fixed costs Selling price per unit — Vi ariable costs per unit NOTE: * In this case, if there is a change in the numbe! weighted-average number of shares is used in t of issued shares during a financial year, the practice.

Downloaded from Stanmorephysics.com LIMPOPO PROVINCIAL GOVERNMENT REPUBLIC OF SOUTH AFRICA DEPARTMENT OF EDUCATION NATIONAL SENIOR CERTIFICATE GRADE 12 ANSWER.BOOK NAMES ciccccccsi ccs BO 2 oko cactseeceeededet aieie See SCHOOL. ........ccccne cece ttt tUURWanan esses Dee eeeeeeeeeeeeeeneeeeeneeeeeseeensneeeens QUESTION MARKS MARKS INTERNAL EXTERNAL OBTAINED MODERATION MODERATION 1 48 2 30 3 22 TOTAL ita This Answer Book consists of 7 pages including the cover page.

Reauwnlgadeal.framaStanmorephysics.com Limpopo/DoE NSC QUESTION 1 MALEKA LTD 1.1. STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 28 FEBRUARY 2022 Sales-8-800 000 Cost ofjsales Gross profit Other operating income Rent income Provision for bad adjustment Gross income Operating expenses Salaries and wages 681 600 Advertising 60 000 Bad debts 6 730 Packing material 15 000 Operating profit Interest income Operating profit before interest expenses Interest expense Net profit before taxation Taxation Net profit after tax

Reauwnlgadeal.framaStanmorephysies.com Limpopo/DoE 1.2 1.2.1 1.2.2 1.2.3 1.2.4 NSC Audit report Explain why the auditors did specifically address the report to shareholders? Explain why the independent auditors referred to pages 25-51 in the report. The directors claimed that the value of the buildings increased over the years and that the value must be increased and shown as additions in the fixed asset note. As the independent auditor, what advice would you give? Provide ONE point. The company received alan (unqualified/qualified/disclaimer) audit report. Give a reason for your answer. TOTAL MARKS 48

ReauwnlgadealeframaStanmorephysics.com Limpopo/DoE NSC QUESTION 2 2.1 | What is the main purpose of a Cash Flow Statement? 2 2.2 CASH FLOW FROM OPERATING ACTIVITIES Cash generated from operations 1 985 500 Interest paid (175 500) Taxation paid Dividends paid CASH FLOW FROM INVESTING ACTIVITIES Fixed assets purchased Proceeds from sale of fixed assets CASH FLOW FROM FINANCING ACTIVITIES Proceeds from the sale of shares Change in loan NET CHANGE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT BEGINNING 21 CASH AND CASH EQUIVALENTS AT END

Reunlgadeal.ftemaStanmorephysics.com NSC Limpopo/DoE 2.3 Calculate the following financial indicators on 31 October 2022: e Gross Profit on sales e /Acid-test ratio e Debt/Equity ratio TOTAL MARKS 30

Reaunlgadeal-ftemaS tanmorephysies.com NSC QUESTION 3 3.1 3.1.1 3.1.2 3.2 The CEO, Nick Petje, currently owns 40% of the issued shares. The directors of the company decided to issue 50% of the unissued shares in July 2022. Calculate the minimum number of shares that Nick must purchase in July 2022 to become the majority shareholder. Nick wants to purchase the additional shares at R6 per share without advertising the shares to the public. Give TWO reasons why you would not approve this arrangement. The directors are proposing that the business operations be expanded in the New financial year. One of the directors suggested that they finance the expansions by taking a loan of R1 000 000, instead of issuing new shares to the public. Quote and explain TWO financial indicators to support his opinion. Limpopo/DoE

Reauwnlgadeal.framaStanmorephysics.com Limpopo/DoE NSC 3.3. Bongani is a shareholder in Machete Limited. He owns 32 000 shares which he purchased two years ago at R4,75 each. 3.3.1 | Calculate the amount of dividends Bongani would earn for the financial year ending 31 October 2022. 3.3.2 | Should Bongani be satisfied with the dividend policy of Machete Limited? Quote and explain relevant financial indicators to support your answer. 3.3.3 | Bongani wants to sell his shares in Machete Limited and invest his funds in an alternative investment. You disagree with him. Quote and explain ONE relevant financial indicator, other than dividends, to discourage him from selling his shares. TOTAL MARKS 22 TOTAL 100 MARKS

Downloaded from Stanmorephysics.com LIMPOPO PROVINCIAL GOVERNMENT REPUBLIC OF SOUTH AFRICA DEPARTMENT OF EDUCATION LIMPOPO DEPARTMENT OF EDUCATION NATIONAL SENIOR CERTIFICATE GRADE 12 MARKING GUIDELINE This question paper consists of 7 pages including the cover page

Rowsleaded:finam Stanmorephysies.com NSC QUESTION 1 MALEKA LTD Limpopo DoE. 1.1. STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 28 FEBRUARY 2022 Sales(8/800 000-19 200v -99 200v) 8 681 600 M* Costjofsales (8 681 600Y + 360 000”) x 100/160 OR (5-426 000 + 225 000v) (5 651 000) M* Gross profit 3 030 600 M* Other operating income 71500 M* Rent income 70 500v” Provision for bad adjustment (3 240v -2 240v) 1 000M* Gross income 3 102 100M Operating expenses (1 799 860) M* Salaries and wages (681 600 -20 000v- 4000”) 657 600 M* Advertising (60 000 — 2 880v'v) 57 120v Bad debts (6 730 + 42 000) 48 730V Packing material (15 000+ 820 — 6 020) 9 800v M* Directors fees 550 000v Audit fees 188 410v Insurance 14 700v Trading stock deficit (1 050 300 + 62 000Y — 1 002 000) 110 300v Depreciation (119 999v + 14 800vv ) 134 799 M* 4500+10 300 Sundry expenses Balancing figure 28 401 4 Operating profit Candidate must use 15% on sales 1302 240 Interest income 80 000v Operating profit before interest expenses _ Operation 1382 240M Interest expense (182 240) v Net profit before taxation 1 200 000Y 40 Taxation (360 000) v Net profit after tax 840 000v

Rowsleaded:fnam Stanmorephysies.com Limpopo DoE. 1.2 1.2.1 1.2.2 1.2.3 1.2.4 NSC Audit report Explain why the auditors did specifically address the report to shareholders? They are the owners of the business. VW >————— a Explain why the independent auditors referred to pages 25-51 in the report. Any valid explanation vv Part-marks for unclear / incomplete answers. e Auditors are responsible for only parts / certain pages of the annual report. e They are not accountable for the other information in the annual reports. e Financial statements on pages 25-51 were subjected to audit / examination. e Additional information, such as corporate social investment matters, is not audited. Do not accept statistical sampling as a reason. ——————E—E— eee The directors claimed that the value of the buildings increased over the years and that the value must be increased and shown as additions in the fixed asset note. As the independent auditor, what advice would you give? Provide ONE point. ONE valid point “~ Part-marks for unclear / incomplete answers e It is fraudulent to indicate revaluation as an addition e No audit evidence exists, so there is no proof of the actual value of the buildings e GAAP prescribes the historical (original) cost principle when recording assets e Only physical acquisitions/expansions can be shown as additions The company received afan (unqualified/qualified/disclaimer) audit report. Qualified v Give a reason for your answer. e The auditors queried the increase of the assets/in the Balance sheet. ¥ e The financial statement fairly present the-financial position except for the increase in the value of the fixed asset in the Balance sheet

Rowsleaded:finam Stanmorephysies.com Limpopo DoE. NSC QUESTION 2 21 2.2 What is the main purpose of a Cash Flow Statement? It provides-users of financial statements with information on the inflow and outflow of the cash-resources of the companyY “ To see-how monies were generated or spent and what the cash flow position is. To account for the difference in opening and closing bank balances To show management of cash CASH AND CASH EQUIVALENTS AT END 3 2 291 500Y CASH FLOW FROM OPERATING ACTIVITIES 625 000M Cash generated from operations 1 985 500 Interest paid (175 500) Taxation paid (27 500 v+ 375 000v + 22 500”) ( 425 000) SARS (Income Tax) one part correct 425 000 27500 375 000 22 500 Dividends paid (385 000 +¥ 825 000 —Y 450 000) v (760 000) M1 OR 385 000v +375 000vY zorrect one part 9 CASH FLOW FROM INVESTING ACTIVITIES 534 000 4 Fixed assets purchased (48 000) ¥ Proceeds from sale of fixed assets 582 000M (500 000v + 82 000” 5 CASH FLOW FROM FINANCING ACTIVITIES 925 000M A Proceeds from the sale of shares 300 000v Change in loan (2 000 000 - 1375000 ) 625 000V v 4 NET CHANGE IN CASH AND CASH EQUIVALENTS 2 084 000Y CASH AND CASH EQUIVALENTS AT BEGINNING 207 500 v

Rowsleaded:finam Stanmorephysies.com 2.3 NSC Limpopo DoE. Calculate the following financial indicators on 31 October 2022: e Gross Profit on sales 950000 XxX 100 1750)000 1 = 54, 3% 10) ¥ v e “Acid-test ratio (1075000 +2291 500) v: 1 450 000 v 3 366 500 =2,3:1M or2,32:1 one part correct OR (4 804 000 - 1 437 500)”: 1 450 000V" =2,3:1M e Debt/Equity ratio 2 000 000: 4 450 000 =0,4:1 Vv VY (or0,5:1)

Rowsleaded:finam Stanmorephysies.com NSC QUESTION 3 3.1 The CEO, Nick Petje, currently owns 40% of the issued shares. 3.2 The directors of the company decided to issue 50% of the unissued shares in July 2022. 3.1.1 —Galculate the minimum number of shares that Nick must purchase in July 2022 to become the majority Shareholder 40% of 1200 000 =480 000” 50% of 1600 000 = 800 000v Nick needs 800 000- 480000 =320 000+1= 320 001M =320 000+100=320 100 Or 51% of 1600 000 = 816 000-480 000 = 336 000 3.1.2 Nick wants to purchase the additional shares at R6 per share without advertising the shares to the public. Give TWO reasons why you would not approve this arrangement. It is unethical as these shares were not advertised/ He want to buy these shares at a price lower than the market price/Not allowed by law (Companies Act)/ Not allowed by law as the shares should be advertised through prospectus/Insider trading/Law should be applied to safeguard the integrity of the business The directors are proposing that the business operations be expanded in the New financial year. One of the directors suggested that they finance the expansions by taking a loan of R1 000 000, instead of issuing new shares to the public. Quote and explain TWO financial indicators to support his opinion. Debt/Equity ratio * It has increased from 0,34: 1 to 0,44:1. * Company still has a low financial risk. Return on average capital employed * It has increased from 18% to 26% * Company is positively geared as it exceeds the rate of borrowing which currently is 13%. Limpopo DoE.

Rowsleaded:fnam Stanmorephysies.com Limpopo DoE. 3.3 NSC Bongani is a shareholder in Machete Limited. He owns 32 000 shares which he purchased two years ago at R4,75 each. 3.3.1 Calculate the amount of dividends Bongani would earn for the financial year ending 31 October 2022. 32/000 x 110 cents = R35 200” M_ bne part correct (R1,10) 3.3.2 Should Bongani be satisfied with the dividend policy of Machete Limited? Quote and explain relevant financial indicators to support your answer. Yes/No Indicator ¥ Figures “ Explanation ¥ Explanation for yes: EPS was 130 cents and DPS was 110 cents. (110/130 x 100) 84.6%(85%) of earnings given to shareholders, compared to (75/94 x 100) 79,8%(80%) given in the previous financial year. The dividends have increased from 75 cents to 110 cents Explanation for no: EPS was 130 cents and DPS was 110 cents. (110/130 x 100) 84,6%(85%) of earnings given to shareholders, compared to (75/94 x 100) 79,8%(80%) given in the previous financial year. More is being paid out on dividends and less is being retained for future expansion. 3.3.3 Bongani wants to sell his shares in Machete Limited and invest his funds in an alternative investment. You disagree with him. Quote and explain ONE relevant financial indicator, other than dividends, to discourage him from selling his shares. Financial indicator v trend ~ comparison with interest on fixed depositv ” ROSHE improved from 15% in 2021 to 24,1% in 2022 Greater than the return on alternative investment 6,5%. Strong performance of the company may continue inthe future to offer greater returns to Bongani.