PSAF APRIL 2022 ICAG COLLEGE

ICAG COLLEGE
PUBLIC SECTOR ACCOUNTING AND FINANCE
TUTORIAL QUESTIONS – ANALYSIS OF FINANCIAL STATEMENTS

ILLUSTRATION 1 – COMPARISON WITH BUDGET

Stated below is the Financial Statement of the Consolidated Fund of the Government of Ghana for
the year ended 2020.
REVENUE BUDGET ACTUAL
Direct Tax 326,040 261,115
Indirect Tax 354,676 324,889
Grants 104,872 14,055
Other revenue 86,803 25,464
Total revenue 872,391 535,523

EXPENDITURE
Compensation of Employees 375,166 336,946
Use of Goods and Services 72,600 48,920
Interest 133,097 206,622
Social benefits 3,232 -
Other expenses 74,904 38,125
Consumption of fixed capital 81,600 1,250
740,599 631,863
Excess of revenue over the Expenditure 131,792 (96,340)

From the above information, you are required to:

(a) Assess the performance of the Government spending and Revenue Generation, stating two (2)
possible reasons for the difference between the Actual and Budgeted results of each of the accounts
headings from the Revenue and Expenditure Statement above.

(b) State five (5) reasons why budgeted figures and prior year figures are included in the Central
Government financial statements

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Compiled – Alhassan Trawule
PSAF APRIL 2022 ICAG COLLEGE

ILLUSTRATION 2 – TREND ANALYSIS

The financial information below relates to the Consolidated Fund of Ghana.
Statement of Financial Position of the Consolidated Fund as at December 31, 2020
2020 2019
GH¢' million GH¢’ million
Non-Current Assets
Property Plant and Equipment 8,400 11,200
Equity investment 20,000 24,000
Total Non-current assets 28,400 35,200
Current Assets
Work in progress 5,000 4,000
Receivables 2,200 1,800
Cash and cash equivalent 6,500 5,960
Other assets 900 1,200
Total current assets 24,600 12,960
Total assets 43,000 48,160
FUNDS AND LIABILITIES
Accumulated Fund (222,560) (223,240)
Current Liabilities
Payables 3,200 38,000
Trust monies 5,080 4,600
Domestic loans 22,480 25,000
Total Current Liabilities 30,760 67,800
Non-Current Liabilities
Domestic loans 104,000 86,000
External loans 130,800 117,800
Total Non-Current Liabilities 234,800 203,800
Total Funds and Liabilities 43,000 48,160

Additional Information:
i) The total market value of all final goods and services produced domestically in Ghana for 2020 and 2019
fiscal year amounted to GH¢410,201,880,000 and GH¢371,200,800,000 respectively.

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Compiled – Alhassan Trawule
PSAF APRIL 2022 ICAG COLLEGE

ii) According to the Statistical Service data, the population of the country is estimated as 50,000,000 in
2020 and 57,800,000 in 2019.
Required:
From the information above, compute for the two financial years, the following ratios:
a. Gross Debt
b. Net Debt percentage
c. Debt per Capita
d. Debt to Gross Domestic Product ratio
e. Total Asset to debt
f. Capital Asset per Capita

ii) Based on the ratios computed, write a report discussing and analysing the financial position of the
Consolidated Fund to the Head of a “think tank” of a Civil Society Organisation for Financial
Accountability.

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Compiled – Alhassan Trawule
PSAF APRIL 2022 ICAG COLLEGE

ILLUSTRATION 3 – COMPARISON WITH COMPETITIOR / OTHERS

Country A and Country B are Sub-Saharan African Countries which attained independence around the same
period. Presented below are the financial statements of the two countries.
Statement of Financial Performance for the year ended December 31 2018
Country A Country B
GH¢ million GH¢ million
Revenues
Domestic Tax 26,450 17,000
International trade tax 18,200 21,330
Non-tax revenue 7,500 12,800
Grants 1,300 1,100
Total revenue 53,450 52,230
Expenditure
Compensation for employees 29,800 20,300
Use of goods and services 10,300 14,000
Consumption of fixed capital 240 280
Exchange difference 990 600
Interest 19,660 10,460
Subsidies 510 120
Other expenses 1,600 1,430
Total Expenditure 63,100 47,190
Net Operation Result (9,650) 5,040

Other information:
Population 20,000,000 15,000,000
Gross Domestic Product (GH¢) 145,000,000,000 110,000,000

Statement of Financial Position as at 31 December 2018

Country A Country B
GH¢ million GH¢ million
Non-Current Assets
Property, plant and equipment 2,450 22,400
Equity investment 8,000 5,500

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Compiled – Alhassan Trawule
PSAF APRIL 2022 ICAG COLLEGE

10,450 27,900
Current Assets
Receivables 6,700 8,400
Cash and cash equivalent 4,700 18,000
11,400 26,400
Total Assets 21,850 54,300

Funds and Liabilities

Accumulated Fund (80,200) 4,800
Current Liabilities
Payables 6,200 4,100
Trust monies 1,400 900
Domestic debt 16,000 4,500
23,600 9,500
Non-current Liabilities
Domestic debt 36,000 18,000
External debt 42,450 22,000
78,450 40,000
Total Fund and Liabilities 21,850 54,300

Required:
a. From the information provided, compute for the two countries respectively:
i. Grant to Revenue ratio
ii. Wage Bill to Tax Revenue ratio
iii. Interest to Revenue ratio
iv. Capital Assets ratio
v. Debt to GDP ratio
vi. Capital expenditure per Capita

b. Based on the result in question (a), write a report discussing and analyzing the financial
performance and financial position of the two countries. Include in your report the limitations of
the analysis of the two countries.

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Compiled – Alhassan Trawule
PSAF APRIL 2022 ICAG COLLEGE

ILLUSTRATION 4 – COMMON SIZE ANALYSIS

Presented below is the Statement of Financial Performance of the Consolidated Fund of Ghana.
Revenue and Expenditure Statement of the Consolidated Fund for the year ended 31 December, 2020
GH¢’ million GH¢’ million GH¢’ million
2020 2019 2020
Actual Actual Budget
Revenues
Direct tax 32,900 24,800 40,400
Indirect tax 44,400 51,200 68,200
Non-tax revenue 15,000 11,600 12,000
Grants 2,600 3,800 4,000
Total revenue 94,900 91,400 126,600
Expenditure
Compensation for employees 59,600 48,600 51,800
Use of goods and services 20,600 19,720 36,000
Consumption of fixed Asset 480 440 -
Interest 39,320 29,100 33,560
Subsidies 1,020 860 3,840
Other expenses 3,200 2,860 4,900
Exchange difference 1,240 800 -
Total Expenditure 125,460 102,380 130,100
Net Operation Result (30,560) (10,980) (3,500)

Required:
Based on a Common Size Statement of Financial Performance, write a report discussing and analysing the
financial performance of the Consolidated Fund in line with the Recommended Practice Guide 2,
Financial Statement Discussion and Analysis.

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Compiled – Alhassan Trawule