Dreamit Electronics Ltd: 2024-2025 Projections

Company Overview

• Dreamit Electronics Ltd celebrated its 10th anniversary in 2023.
• The company aims to lead the South African electronics industry through growth and innovation.
• Committed to fulfilling economic and social responsibilities as a good corporate citizen.

Financial Position on 31 December 2023

• Fixed assets valued at R30,000,000.
• Current assets include:
  • Inventory: R9,400,000
  • Accounts receivable: R8,000,000
  • Cash: R1,600,000
• Equity comprises:
  • Ordinary share capital: R17,000,000
  • Retained earnings: R6,400,000
• Liabilities include:
  • Long-term loan to Mesa Bank: R22,000,000
  • Trade creditors: R3,600,000

Projections for 2024

• Anticipated sales increase from R30,000,000 in 2023 to R40,000,000 in 2024.
• All sales conducted on credit, with an accounts receivable collection period of 36.5 days.
• Expected gross margin of 25% and net profit margin of 10%.
• Total inventory purchases projected at R25,000,000, also on credit.
• Estimated cash increase of R500,000 within 2024.
• Planned expenditure of R24,000,000 on land and buildings in Q4 2024.
• Forecasted total depreciation for 2024: R4,000,000.
• Issuance of 1,000,000 ordinary shares at R4 each scheduled for January 2024.
• Dividends of R3,000,000 anticipated to be recommended at the end of 2024, paid in 2025.
• R5,500,000 payment to Mesa Bank planned for 2024, including R2,000,000 interest on the loan.
• Calculation of required external funding (non-current debt) necessary.

Investment Opportunity for 2025

• Proposal to acquire a new machine costing R4,000,000 at the beginning of 2025.
• The machine will have a useful life of five years with no anticipated scrap value.
• Expected annual profits from the machine:
  • Year 1: R600,000
  • Year 2: R620,000
  • Year 3: R700,000

Explore the ambitious projections of Dreamit Electronics Ltd for 2024 and 2025. As the company celebrates its 10th anniversary, it aims to improve its growth, innovation, and social responsibility in the electronics industry. Test your knowledge on their financial standings and strategic goals.