Calculate the margin and rate of stock turnover for Bizna Distributor Company using the provided financial data.

Welcome back makongo — missed you this week. Here are the calculations for Bizna Distributor Company: a) Required calculate i) Margin The formula for margin (Gross Profit Margin) is: Margin = Gross ProfitSales × 100\% Given: Gross profit = Shs 600,000 Sales = Shs 2,400,000 Step 1: Substitute the values into the formula. Margin = (600,000)/(2,400,000) × 100\% Step 2: Calculate the margin. Margin = 0.25 × 100\% = 25\% The margin is 25\%. ii) Rate of stock turnover The formula for the rate of stock turnover is: Rate of stock turnover = Cost of Goods SoldAverage Stock First, calculate the Cost of Goods Sold (COGS): COGS = Opening Stock + Purchases - Closing Stock Given: Opening stock = Shs 285,000 Purchases = Shs 1,830,000 Closing stock = Shs 315,000 Step 1: Calculate COGS. COGS = 285,000 + 1,830,000 - 315,000 = 1,800,000 Shs Next, calculate the Average Stock: Average Stock = Opening Stock + Closing Stock2 Step 2: Calculate Average Stock. Average Stock = (285,000 + 315,000)/(2) = (600,000)/(2) = 300,000 Shs Step 3: Calculate the Rate of Stock Turnover. Rate of stock turnover = (1,800,000)/(300,000) = 6 times The rate of stock turnover is 6 times. iii) Return on capital employed The formula for Return on Capital Employed (ROCE) is: ROCE = Net ProfitCapital Employed × 100\% First, calculate Net Profit. Net Profit = Gross Profit - Expenses Given: Gross profit = Shs 600,000 Expenses = Shs 360,000 Step 1: Calculate Net Profit. Net Profit = 600,000 - 360,000 = 240,000 Shs Next, calculate Capital Employed. Capital Employed = Fixed Assets + Working Capital Where Working Capital = Current Assets - Current Liabilities. Current Assets include: Debtors = Shs 900,000 Bank = Shs 35,000 Closing stock = Shs 315,000 Step 2: Calculate Total Current Assets. Current Assets = 900,000 + 35,000 + 315,000 = 1,250,000 Shs Given: Current liabilities = Shs 438,000 Step 3: Calculate Working Capital. Working Capital = 1,250,000 - 438,000 = 812,000 Shs Given: Fixed assets = Shs 400,000 Step 4: Calculate Capital Employed. Capital Employed = 400,000 + 812,000 = 1,212,000 Shs Step 5: Calculate ROCE. ROCE = (240,000)/(1,212,000) × 100\% ROCE ≈ 0.1980198 × 100\% ≈ 19.80\% The return on capital employed is 19.80\%. iv) Current ratio The formula for Current Ratio is: Current Ratio = Current AssetsCurrent Liabilities From previous calculations: Current Assets = Shs 1,250,000 Current liabilities = Shs 438,000 Step 1: Substitute the values into the formula. Current Ratio = (1,250,000)/(438,000) Step 2: Calculate the current ratio. Current Ratio ≈ 2.85:1 The current ratio is 2.85:1. b) Explain five ways in which the Entrepreneur contributes to the production of goods. • An entrepreneur initiates and organizes the factors of production (land, labor, capital) to start a business. • They bear the risks associated with the business, such as potential losses or failure. • Entrepreneurs innovate by introducing new products, services, or production methods. • They make key decisions regarding resource allocation, production processes, and marketing strategies. • Entrepreneurs create employment opportunities by establishing and expanding businesses, which contributes to economic growth. a) Describe five means of payment that a trader may use to settle business debts. • Cash: Physical currency (notes and coins) used for immediate payment. • Cheque: A written order to a bank to pay a stated sum of money from the drawer's account to the payee. • Bank transfer (EFT/RTGS): Electronic movement of funds from one bank account to another. • Debit/Credit card: Plastic cards linked to a bank account or credit line, allowing electronic payments at point-of-sale terminals or online. • Mobile money: Payment services operated via mobile phones, allowing users to send and receive money, pay bills, and make purchases. b) Explain five indicators of under development in Kenya. • Low per capita income: A low average income per person indicates limited economic productivity and widespread poverty. • High levels of poverty: A significant portion of the population living below the poverty line, struggling to meet basic needs like food, shelter, and healthcare. • High unemployment rates: A large number of people who are willing and able to work but cannot find jobs, leading to underutilization of human resources. • Reliance on primary sector: A heavy dependence on agriculture and raw material extraction, with limited industrialization and value addition. • Poor infrastructure: Inadequate development of essential facilities like roads, electricity, water supply, and communication networks, hindering economic activity and quality of life. Send me the next one 📸