- 10 Marks
PSAF – Nov 2021 – L2 – Q3b – Financial Statements Discussion and Analysis
Prepare a Common Size Statement of Financial Performance and analyze the financial performance of Okagya Municipal Assembly for 2020.
Question
Presented below is the Statement of Financial Performance of Okagya Municipal Assembly for the year ended 31 December 2020.
| GH¢’million | 2020 Actual | 2019 Actual | 2020 Budget |
|---|---|---|---|
| Revenues | |||
| Decentralized Transfer | 16,450 | 12,400 | 20,200 |
| IGF | 22,200 | 25,600 | 34,100 |
| Donation and Grants | 1,300 | 1,900 | 2,000 |
| Total Revenue | 39,950 | 39,900 | 56,300 |
| Expenditure | |||
| Compensation for employees | 29,800 | 24,300 | 25,900 |
| Use of goods and services | 10,300 | 9,860 | 18,000 |
| Consumption of fixed Asset | 240 | 220 | 0 |
| Interest | 19,660 | 14,550 | 16,780 |
| Grants | 510 | 430 | 1,920 |
| Other expenses | 1,600 | 1,430 | 2,450 |
| Total Expenditure | 62,110 | 50,790 | 65,050 |
| Net Operation Result | (22,160) | (10,890) | (8,750) |
Required:
i) Prepare a Common Size Statement of Financial Performance for the year ended 31 December 2020.
(6 marks)
ii) Based on the Common Size Statement of Financial Performance prepared in (i) above, write a report analyzing the financial performance of Okagya Municipal Assembly in line with the Recommended Practice Guide 2, Financial Statement Discussion and Analysis.
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