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a) Calculate the following ratios for 2016 and 2015, showing detailed calculations as to how you arrive at each number. A ROE B Gross profit margin C Total asset turnover D Inventory turnover E Current ratio F Debt-to-equity G Interest coverage ratio.   b) Using the financial statements and the ratios calculated above (and any other ratios you like to calculate), discuss the performance of Cobham PLC in 2016.   c) Critically discuss the need for the public limited companies to prepare a Statement of Cash Flows and explain the usefulness of the information contained therein from the perspective of a financial analyst.

a) Calculate the following ratios for 2016 and 2015, showing detailed calculations as to how you arrive at each number. A ROE B Gross profit margin C Total asset turnover D Inventory turnover E Current ratio F Debt-to-equity G Interest coverage ratio.   b) Using the financial statements and the ratios calculated above (and any other ratios you like to calculate), discuss the performance of Cobham PLC in 2016.   c) Critically discuss the need for the public limited companies to prepare a Statement of Cash Flows and explain the usefulness of the information contained therein from the perspective of a financial analyst.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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a) Calculate the following ratios for 2016 and 2015, showing detailed calculations as to how you arrive at each number.

A ROE

B Gross profit margin

C Total asset turnover

D Inventory turnover

E Current ratio

F Debt-to-equity

G Interest coverage ratio.

 

b) Using the financial statements and the ratios calculated above (and any other ratios you like to calculate), discuss the performance of Cobham PLC in 2016.

 

c) Critically discuss the need for the public limited companies to prepare a Statement of Cash Flows and explain the usefulness of the information contained therein from the perspective of a financial analyst.

Below you will find the financials of Cobham PLC for 2014-2016: Income statement £m 2016 2015 2014 Revenue 2,072.0 (1,567.3) (1,408.2) (1,290.1) 663.8 1,943.9 1,851.7 Cost of sales Gross profit SG&A 376.6 561.6 (1,155.7) (779.1) 4.1 (651.8) 12.0 (504.0) 57.6 Operating (loss) profit Finance income 5.2 6.4 (39.7) 24.3 Finance cost (72.9) (847.9) 52.8 (795.1) (57.0) (39.8) 2.1 (37.7) (Loss)/profit before taxation Тахation 4.7 29.0 (Loss)/profit after taxation Balance sheet £m Non-current assets PPE & Intangibles Investment properties Investment in joint ventures and associates Trade and other receivables Deferred tax asset 2016 2015 2014 1,588.8 2,109.4 4.3 3.0 2,430.8 10.4 3.1 3.6 3.6 66.0 42.3 71.3 11.4 51.1 10.5 12.6 2,212.0 Financial assets 25.8 1,730.1 13.7 2,519.6 Current assets Inventories 405.3 410.4 429.5 Trade and other receivables 409.8 366.0 435.3 Current tax receivables 3.1 8.6 0.4 Financial assets (including cash) 244.7 1,062.9 320.6 1,105.6 236.4 1,101.6 Current liabilities Borrowings and other financial liabilities Trade and other payables 103.1 199.7 22.2 398.1 505.5 Provisions 180.6 74.3 60.5 Current tax liabilities 149.5 864.0 125.1 797.2 119.2 707.4 Non-current liabilities 1,462.3 36.2 Borrowings and other financial liabilities Trade and other payables Provisions Deferred tax liabilities 1,235.7 31.5 1,359.0 24.8 68.2 57.3 27.6 66.5 134.5 102.0 1,801.5 102.0 Retirement benefit obligations 87.0 1,439.1 56.7 1,610.7 Equity 489.9 909.7 1112.3
Transcribed Image Text:Below you will find the financials of Cobham PLC for 2014-2016: Income statement £m 2016 2015 2014 Revenue 2,072.0 (1,567.3) (1,408.2) (1,290.1) 663.8 1,943.9 1,851.7 Cost of sales Gross profit SG&A 376.6 561.6 (1,155.7) (779.1) 4.1 (651.8) 12.0 (504.0) 57.6 Operating (loss) profit Finance income 5.2 6.4 (39.7) 24.3 Finance cost (72.9) (847.9) 52.8 (795.1) (57.0) (39.8) 2.1 (37.7) (Loss)/profit before taxation Тахation 4.7 29.0 (Loss)/profit after taxation Balance sheet £m Non-current assets PPE & Intangibles Investment properties Investment in joint ventures and associates Trade and other receivables Deferred tax asset 2016 2015 2014 1,588.8 2,109.4 4.3 3.0 2,430.8 10.4 3.1 3.6 3.6 66.0 42.3 71.3 11.4 51.1 10.5 12.6 2,212.0 Financial assets 25.8 1,730.1 13.7 2,519.6 Current assets Inventories 405.3 410.4 429.5 Trade and other receivables 409.8 366.0 435.3 Current tax receivables 3.1 8.6 0.4 Financial assets (including cash) 244.7 1,062.9 320.6 1,105.6 236.4 1,101.6 Current liabilities Borrowings and other financial liabilities Trade and other payables 103.1 199.7 22.2 398.1 505.5 Provisions 180.6 74.3 60.5 Current tax liabilities 149.5 864.0 125.1 797.2 119.2 707.4 Non-current liabilities 1,462.3 36.2 Borrowings and other financial liabilities Trade and other payables Provisions Deferred tax liabilities 1,235.7 31.5 1,359.0 24.8 68.2 57.3 27.6 66.5 134.5 102.0 1,801.5 102.0 Retirement benefit obligations 87.0 1,439.1 56.7 1,610.7 Equity 489.9 909.7 1112.3
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