Show the statement of financial position, Financial Management

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A friend is looking for advice on one of his investments, KER. KER manufactures stationery supplies, the entity appointed a new Chairman in 2008 and since then has been executed an expansion strategy aimed at pursuing new markets with its active product base.

In the 2009 annual report The Chairman's report included and announces the success of the expansion plan, citing increased returns and profits as evidence of the entity's success, and noting that the entity has invested in non-current assets to ensure returns continues to increase. Your friend is intending to hold his investment in KER based on the positive chairman's report but has asked you to consider the monetary information to assess whether the figures support the chairman's claims.

The statement of financial position as at 31 December 2009 and its comparative is shown below:

2009

2008

$m

$m

ASSETS

Non-current assets

Property, plant and equipment

480

404

Investment in associate

177

-

Available for sale investments

150

140

807

544

Current assets

Inventories

145

65

Receivables

247

134

Cash and cash equivalents

-

22

392

221

Total assets

1,199

765

EQUITY AND LIABILITIES

Equity

Share capital

100

100

Revaluation reserve

74

32

Other reserves

32

22

Retained earnings

457

333

Total equity

663

487

Non-current liabilities

Loans

400

210

Current liabilities

Payables

99

68

Overdraft

37

-

136

68

Total liabilities

536

278

Total equity and liabilities

1,199

765

 


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