Define who claim on the operating profits of a company

Reference no: EM131881499

Question: 1. A company has the following entries on its pro?t and loss statement: Turnover = £20,000, cost of goods sold = £10,000, operating expenses = £2,000, tax paid = £1,000 and pro?t before tax = £5,000. What is interest that has been payable on its loans?

2. Under UK law who has the first claim on the operating profits of a company?

a) Financial institutions who have made loans to a company.

b) The tax authorities (HMRC).

c) Shareholders.

d) Employees.

e) None of the above.

3. A company had shareholders equity equal to £3,700 million and long-term liabilities equal to £300 million in 2014. The operating profit for that year was £90 million pounds, its interest payments £10 million and its tax payments £12 million. What was its return on equity that year (ROE)?

Reference no: EM131881499

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