Ican 2026 Strategic Business Reporting Question 2

As the finance director, you have just been informed by the group managing director of your company, Agbaye Plc, that your company is planning to make another acquisition. The target company is Arugungu Limited, a private limited liability company that has recently had its application for additional loan rejected by its bankers on the basis that there are insufficient assets to offer as security. However, the financial analyst of your company has been asked to provide more information about Arugungu Limited. Find below the email of the financial analyst to the group MD on Arugungu Limited: From: Financial analyst To: Group MD Date: January 31, 2025 Dear Sir, Find attached (Appendix 1) the most recent financial statements of Arugungu Limited for the year ended December 31, 2024. For the last eight years, the company has been manufacturing and selling its own brand of antibiotic drugs known as ARUGMOXIN. Over the last fifteen months, the company has invested in developing an online presence. The sales director of Arugungu Limited has also used his extensive contacts to secure a deal with a chain of wholesale pharmaceutical companies. The contract was set up on July 1, 2024 and has generated revenue of N34million and a strong profit margin. The managing director of Arugungu Limited now wishes to build on the work of the sales director to develop further sales opportunities. However, Arugungu’s Limited bankers that currently provides them with long-term loan and overdraft facilities has rejected Arugungu Limited’s application for additional funding. If you need further information don’t hesitate to contact me Thanks. Mohammed.