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Financial statement analysis 2. Given below are the summarized accounts of Belper Lad for the past five years. These form the basis for the questions which follow Summarized profit and loss accounts of Belper Ltd Sales Cost of sales Trading profit Depreciation Interest Net profit before tax 19X4 £000 93,930 81,750 12,180 1,023 2,727 8,430 2.517 19X5 £000 116,232 101,673 14,559 1,380 2,652 10,527 1,746 301 19x6 £000 259,470 230,334 29,136 3,678 7,707 17,751 9,270 8,481 19X7 £000 278,340 244,809 33,531 4,065 10,167 19,299 7,833 11,466 1089 19X8 £000 372,753 346,695 26,058 8,151 14,082 3,825 2,601 1,224 489

Financial statement analysis 2. Given below are the summarized accounts of Belper Lad for the past five years. These form the basis for the questions which follow Summarized profit and loss accounts of Belper Ltd Sales Cost of sales Trading profit Depreciation Interest Net profit before tax 19X4 £000 93,930 81,750 12,180 1,023 2,727 8,430 2.517 19X5 £000 116,232 101,673 14,559 1,380 2,652 10,527 1,746 301 19x6 £000 259,470 230,334 29,136 3,678 7,707 17,751 9,270 8,481 19X7 £000 278,340 244,809 33,531 4,065 10,167 19,299 7,833 11,466 1089 19X8 £000 372,753 346,695 26,058 8,151 14,082 3,825 2,601 1,224 489

Financial Accounting: The Impact on Decision Makers
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter13: Financial Statement Analysis
Section: Chapter Questions
Problem 13.18MCE
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Financial statement analysis 2. Given below are the summarized accounts of Belper Ltd for the past five years. These the basis for the questions which follow. Summarized profit and loss accounts of Belper Ltd Sales Cost of sales Trading profit Depreciation Interest Net profit before tax Taxation Net profit after tax Extraordinary items Dividends Retained profits Retained at start of year Retained at end of year Fixed assets Freehold land and buildings Leasehold land and buildings Plant and machinery Total gross fixed assets Depreciation freehold Depreciation leasehold Depreciation plant, etc. Total depreciation Net fixed assets Intangible fixed assets Goodwill Investments Patents and trade marks Current assets Stock Debtors Bank and cash Current liabilities Creditors Taxation Dividends Bank loans and overdraft 19X4 Net current assets £000 Financed by Ordinary share capital Share premium account Retained profits Revaluation reserves 93,930 81,750 12,180 1,023 2,727 8,430 2,517 5,913 Summarized balance sheets of Belper Ltd 19X4 £000 5,913 801 5,112 7,911 1,812 6,099 14,637 19,749 19,749 25,848 116,232 101,673 14,559 1,380 2,652 117 4,197 4,314 20,175 19X5 £000 789 486 3,972 20,031 10,527 1,746 8,781 (870) 16,197 459 801 14,058 2,349 8,082 11,541 24,489 28,602 10,581 28,038 19X5 £000 19x6 £000 259,470 230,334 29,136 3,678 7,707 Notes During 19X8 some of the freehold properties were revalued. ()Loans amounting to £22 million were repaid during the year. (i) The extraordinary item shown in the profit and loss account in 19X8 represents the damages received by the company from a libel action against a newspaper. (iv) No fixed assets were disposed of during the year. 17,751 9,270 8,481 8,466 3,339 5,127 (15) 25,848 30.975 14,571 20,559 2,490 5,184 19X4 19X5 17,589 24,693 4,698 6,801 42,318 54,528 19X7 807 849 795 393 3,618 6,063 23,034 53,091 £000 2,229 2,931 19,749 25,848 2,829 7,530 278,340 244,809 33,531 4,065 10,167 19,299 7.833 11,466 4.989 16,455 3,738 12,717 30,975 43,692 26,781 30,000 52,524 55,791 19X6 19X7 19X8 £000 £000 £000 147 345 5,325 8,259 5,472 8,604 12,051 23,130 43,920 43,740 20,598 29,721 5,193 19X8 £000 936 303 8,730 372,753 346.695 26,058 8,151 14,082 3,825 2,601 1,224 489 74,823 1,713 3,672 -1,959 50,427 48,468 597 774 858 11,277 18,747 20,202 69,255 55,659 4,302 3,339 12,564 47,172 89,457 3,396 14,598 30,975 6,735 24,588 768 1,812 4,026 31,194 14,280 23,334 39,720 50,187 58,536 39,702 51,684 90,945 103,896 138,465 936 393 9,345 99,606 19X6 19X7 19X8 60,270 48,987 66,768 7,839 3,273 9.747 121,200 127,083 176,121 CS CamScanner 41,130 72,831 2,712 3,444 3,738 3.672 18,180 29,316 37,638 81,480 76,896 117,585 6,792 7,077 11,247 12,387 50,427 48,468 6,735 9,423
Transcribed Image Text:Financial statement analysis 2. Given below are the summarized accounts of Belper Ltd for the past five years. These the basis for the questions which follow. Summarized profit and loss accounts of Belper Ltd Sales Cost of sales Trading profit Depreciation Interest Net profit before tax Taxation Net profit after tax Extraordinary items Dividends Retained profits Retained at start of year Retained at end of year Fixed assets Freehold land and buildings Leasehold land and buildings Plant and machinery Total gross fixed assets Depreciation freehold Depreciation leasehold Depreciation plant, etc. Total depreciation Net fixed assets Intangible fixed assets Goodwill Investments Patents and trade marks Current assets Stock Debtors Bank and cash Current liabilities Creditors Taxation Dividends Bank loans and overdraft 19X4 Net current assets £000 Financed by Ordinary share capital Share premium account Retained profits Revaluation reserves 93,930 81,750 12,180 1,023 2,727 8,430 2,517 5,913 Summarized balance sheets of Belper Ltd 19X4 £000 5,913 801 5,112 7,911 1,812 6,099 14,637 19,749 19,749 25,848 116,232 101,673 14,559 1,380 2,652 117 4,197 4,314 20,175 19X5 £000 789 486 3,972 20,031 10,527 1,746 8,781 (870) 16,197 459 801 14,058 2,349 8,082 11,541 24,489 28,602 10,581 28,038 19X5 £000 19x6 £000 259,470 230,334 29,136 3,678 7,707 Notes During 19X8 some of the freehold properties were revalued. ()Loans amounting to £22 million were repaid during the year. (i) The extraordinary item shown in the profit and loss account in 19X8 represents the damages received by the company from a libel action against a newspaper. (iv) No fixed assets were disposed of during the year. 17,751 9,270 8,481 8,466 3,339 5,127 (15) 25,848 30.975 14,571 20,559 2,490 5,184 19X4 19X5 17,589 24,693 4,698 6,801 42,318 54,528 19X7 807 849 795 393 3,618 6,063 23,034 53,091 £000 2,229 2,931 19,749 25,848 2,829 7,530 278,340 244,809 33,531 4,065 10,167 19,299 7.833 11,466 4.989 16,455 3,738 12,717 30,975 43,692 26,781 30,000 52,524 55,791 19X6 19X7 19X8 £000 £000 £000 147 345 5,325 8,259 5,472 8,604 12,051 23,130 43,920 43,740 20,598 29,721 5,193 19X8 £000 936 303 8,730 372,753 346.695 26,058 8,151 14,082 3,825 2,601 1,224 489 74,823 1,713 3,672 -1,959 50,427 48,468 597 774 858 11,277 18,747 20,202 69,255 55,659 4,302 3,339 12,564 47,172 89,457 3,396 14,598 30,975 6,735 24,588 768 1,812 4,026 31,194 14,280 23,334 39,720 50,187 58,536 39,702 51,684 90,945 103,896 138,465 936 393 9,345 99,606 19X6 19X7 19X8 60,270 48,987 66,768 7,839 3,273 9.747 121,200 127,083 176,121 CS CamScanner 41,130 72,831 2,712 3,444 3,738 3.672 18,180 29,316 37,638 81,480 76,896 117,585 6,792 7,077 11,247 12,387 50,427 48,468 6,735 9,423
7:18 Back FSA FINAL ASSIGNMENT.pdf Investments Patents and trade marks Current assets Stock Debtors Bank and cash Current liabilities Creditors Taxation Dividends Bank loans and overdraft Net current assets Financed by Ordinary share capital Share premium account Retained profits Revaluation reserves Total equity and reserves Loans A 703 OU/ 486 795 3,972 3,618 20.031 23,034 849 393 6,063 53,091 16,197 459 801 19X4 19X6 17,589 24,693 60,270 4,698 7,839 6,801 54,528 121,200 42,318 19X5 2,229 2,931 19,749 24,588 768 1,812 10,581 4,026 28,038 31,194 81,480 14,280 23,334 39,702 51,684 936 303 8,730 74,823 99,606 2,829 7,530 25,848 936 393 9,345 CS CamScanner 19X7 19X8 48,987 66,768 3,273 9,747 127,083 176,121 55,659 4,302 3,339 18,180 29,316 37,638 76,896 117,585 50,187 58,536 39,720 90,945 103,896 138,465 41,130 2,712 3,738 72,831 3,444 3,672 3,396 6,792 7,077 14,598 11,247 12,387 30,975 50,427 48,468 6,735 6,735 9,423 36,207 55,704 15,477 24,909 14,793 39,702 51,684 90,945 103,896 138,465 75,201 77,355 35,241 28,695 61,110 (a) From a review of the information above identify the areas which you would concentrate on in your analysis of the position of Belper Ltd. (b) Produce common size profit and loss accounts for the five years and analyse these state- ments with particular reference to the profitability of Belper. (c) Calculate the trends in the Sales and Cost of sales and comment on the information disclosed by your analysis. (d) Using whatever form of analysis you consider appropriate comment on the financial risk profile of Belper Ltd for the five years under review. (e) Based on your analysis write a brief report for the bank advising them on whether to continue to provide finance for Belper Ltd. f) Apart from the information arising from your analysis what other information would you advise the bank to consider when making its decision? g) Discuss how your analysis would have been altered if you were carrying out the analysis on behalf of a prospective shareholder. CS CamScanner A
Transcribed Image Text:7:18 Back FSA FINAL ASSIGNMENT.pdf Investments Patents and trade marks Current assets Stock Debtors Bank and cash Current liabilities Creditors Taxation Dividends Bank loans and overdraft Net current assets Financed by Ordinary share capital Share premium account Retained profits Revaluation reserves Total equity and reserves Loans A 703 OU/ 486 795 3,972 3,618 20.031 23,034 849 393 6,063 53,091 16,197 459 801 19X4 19X6 17,589 24,693 60,270 4,698 7,839 6,801 54,528 121,200 42,318 19X5 2,229 2,931 19,749 24,588 768 1,812 10,581 4,026 28,038 31,194 81,480 14,280 23,334 39,702 51,684 936 303 8,730 74,823 99,606 2,829 7,530 25,848 936 393 9,345 CS CamScanner 19X7 19X8 48,987 66,768 3,273 9,747 127,083 176,121 55,659 4,302 3,339 18,180 29,316 37,638 76,896 117,585 50,187 58,536 39,720 90,945 103,896 138,465 41,130 2,712 3,738 72,831 3,444 3,672 3,396 6,792 7,077 14,598 11,247 12,387 30,975 50,427 48,468 6,735 6,735 9,423 36,207 55,704 15,477 24,909 14,793 39,702 51,684 90,945 103,896 138,465 75,201 77,355 35,241 28,695 61,110 (a) From a review of the information above identify the areas which you would concentrate on in your analysis of the position of Belper Ltd. (b) Produce common size profit and loss accounts for the five years and analyse these state- ments with particular reference to the profitability of Belper. (c) Calculate the trends in the Sales and Cost of sales and comment on the information disclosed by your analysis. (d) Using whatever form of analysis you consider appropriate comment on the financial risk profile of Belper Ltd for the five years under review. (e) Based on your analysis write a brief report for the bank advising them on whether to continue to provide finance for Belper Ltd. f) Apart from the information arising from your analysis what other information would you advise the bank to consider when making its decision? g) Discuss how your analysis would have been altered if you were carrying out the analysis on behalf of a prospective shareholder. CS CamScanner A
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