Required Using the information from the given financial statements, statement of financial position (balance sheets) and income statement (profit & loss accounts) in page 3, calculate and interpret the following ratios for XYZ Plc for the years ended March 31 2019 and 2020, respectively: a) Operating Profit Margin b) Inventory days c) Payable period d) Receivable period e) Acid Test Ratio f) EPS (Earnings Per Share)

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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Notes relating to the above Statements (pictures):

i. The market value of the shares of the business at the end of the reporting period was £3.00 for 2019 and £2.00 for 2020.

ii. All sales and purchases are made on credit.

iii. At 1 April 2018, the trade receivables stood at £250 million and the trade payables at £210 million.

iv. A dividend of £40 million had been paid to the shareholders in respect of each of the years.

v. The business employed 14,000 staff at 31 March 2019 and 18,628 at 31 March 2020.

vi. The business expanded its capacity during 2020 by setting up a new warehouse and distribution centre.

vii. At 1 April 2018, the total of equity stood at £450 million and the total of equity and non-current liabilities stood at £650 million.

Required

Using the information from the given financial statements, statement of financial position (balance sheets) and income statement (profit & loss accounts) in page 3, calculate and interpret the following ratios for XYZ Plc for the years ended March 31 2019 and 2020, respectively:

a) Operating Profit Margin

b) Inventory days

c) Payable period

d) Receivable period

e) Acid Test Ratio

f) EPS (Earnings Per Share)   

(Please don't copy other answers)

 

Income Statements (Profit & Loss Accounts) for the year ended 31 March
2020
£m
Revenue
Cost of sales
Gross profit
Operating expenses
Operating profit
Interest Payable
Profit before taxation
Taxation
Profit for the year
2019
£m
2500 2750
(1850)
(2375)
650
375
(340)
35
(20)
15
(3)
12
(410)
240
(18)
222
(55)
167
Transcribed Image Text:Income Statements (Profit & Loss Accounts) for the year ended 31 March 2020 £m Revenue Cost of sales Gross profit Operating expenses Operating profit Interest Payable Profit before taxation Taxation Profit for the year 2019 £m 2500 2750 (1850) (2375) 650 375 (340) 35 (20) 15 (3) 12 (410) 240 (18) 222 (55) 167
The Financial statements below are to be used for Task 3
XYZ PIC - Statements of financial position (Balance Sheets) as at 31 March
2019
2020
£m
£m
ASSETS
Non-current assets
Property, plant & equipment (at cost less depreciation)
Land & buildings
Fixtures & fittings
Current assets
Inventories
Trade receivables
Cash at bank
Total assets
EQUITY & LIABILITIES
Equity
£0.50 ordinary shares
Retained earnings
Non-current liabilities
Borrowings - 9% loan notes (secured)
Current liabilities
Trade payables
Taxation
Short-term borrowings (all bank overdraft)
Total equity & liabilities
386
134
520
350
240
430
170
600
5
595 - 690
1115 1290
250
410
280
165
22
400 400
275
245
675
645
I
350
200
4
3
91
190
295
1115 1290
Transcribed Image Text:The Financial statements below are to be used for Task 3 XYZ PIC - Statements of financial position (Balance Sheets) as at 31 March 2019 2020 £m £m ASSETS Non-current assets Property, plant & equipment (at cost less depreciation) Land & buildings Fixtures & fittings Current assets Inventories Trade receivables Cash at bank Total assets EQUITY & LIABILITIES Equity £0.50 ordinary shares Retained earnings Non-current liabilities Borrowings - 9% loan notes (secured) Current liabilities Trade payables Taxation Short-term borrowings (all bank overdraft) Total equity & liabilities 386 134 520 350 240 430 170 600 5 595 - 690 1115 1290 250 410 280 165 22 400 400 275 245 675 645 I 350 200 4 3 91 190 295 1115 1290
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