ou have recently been employed as a financial analyst for Crusher PLC and have just been provided the most recent financial statements for the 2 years covering 2019 and 2020. The Board of Directors have expressed concerns about the performance of the company and has asked you to analyse the company’s current financial position. The following are the financial statements of Crusher PLC for 2019 and 2020. Income Statement for year ended 31 December 2019 2020 £000 £000 Turnover 17,640 25,690 Cost of Sales (10,100) (16,980) Gross Profit 7,540 8,710 Operating Expenses (3,789) (5,257) Operating Profit 3,751 3,453 Interest Payable - (344) Profit before Taxation 3,751 3,109 Taxation (942) (777) Profit for the year 2,809 2,332 Statement of Financial Position as at 31 December 2019 2020 £000 £000 ASSETS Non-Current Assets 11,120 16,880 Current Assets Inventories 1,840 3,934 Trade Receivables 1,011 2,190 Cash 422 111 3,273 6,235 Total Assets 14,393 23,115 EQUITY & LIABILITIES Equity Ordinary shares of £0.50 each 8,000 8,000 Capital Reserves 950 950 Retained Earnings 1,112 2,544 Non-Current Liabilities 10,062 11,494 Loan Notes - 2,775 Current Liabilities Trade Payables 1,605 3,598 Other Payables 1,784 2,646 Taxation 942 777 Bank Overdraft - 1,825 4,331 8,846 Total Equity & Liabilities 14,393 23,115 Crusher PLC paid a dividend of £800,000 in 2019, and £900,000 in 2020. Required: Calculate the following ratios for both 2019 and 2020 (use year end figures where statement of financial position items are involved): Return on capital Return on ordinary shareholder Gross profit
You have recently been employed as a financial analyst for Crusher PLC and have just been provided the most recent financial statements for the 2 years covering 2019 and 2020. The Board of Directors have expressed concerns about the performance of the company and has asked you to analyse the company’s current financial position. The following are the financial statements of Crusher PLC for 2019 and 2020.
Income Statement for year ended 31 December
|
|
2019 |
2020 |
|
£000 |
£000 |
|
|
Turnover |
17,640 |
25,690 |
|
Cost of Sales |
(10,100) |
(16,980) |
|
Gross Profit |
7,540 |
8,710 |
|
Operating Expenses |
(3,789) |
(5,257) |
|
Operating Profit |
3,751 |
3,453 |
|
Interest Payable |
- |
(344) |
|
Profit before |
3,751 |
3,109 |
|
Taxation |
(942) |
(777) |
|
Profit for the year |
2,809 |
2,332 |
|
|
2019 |
2020 |
|
£000 |
£000 |
|
|
ASSETS Non-Current Assets |
11,120 |
16,880 |
|
Current Assets Inventories |
1,840 |
3,934 |
|
Trade Receivables |
1,011 |
2,190 |
|
Cash |
422 |
111 |
|
|
3,273 |
6,235 |
|
Total Assets |
14,393 |
23,115 |
|
EQUITY & LIABILITIES Equity Ordinary shares of £0.50 each |
8,000 |
8,000 |
|
Capital Reserves |
950 |
950 |
|
|
1,112 |
2,544 |
|
Non-Current Liabilities |
10,062 |
11,494 |
|
Loan Notes |
- |
2,775 |
|
Current Liabilities Trade Payables |
1,605 |
3,598 |
|
Other Payables |
1,784 |
2,646 |
|
Taxation |
942 |
777 |
|
Bank Overdraft |
- |
1,825 |
|
|
4,331 |
8,846 |
|
Total Equity & Liabilities |
14,393 |
23,115 |
Crusher PLC paid a dividend of £800,000 in 2019, and £900,000 in 2020.
Required:
Calculate the following ratios for both 2019 and 2020 (use year end figures where statement of financial position items are involved):
- Return on capital
- Return on ordinary shareholder
- Gross profit
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