Present suitable ratio which highlight financial performance

Assignment Help Financial Accounting

Reference no: EM13907561

The summarized accounts of Ragidem pk are shown below:

Group consolidated profit and loss accounts (fm)

	1988	1989	1990	1991	1992
Turnover	220	264	294	314	327
Operating profit	30	32	34	39	43
Add interest
receivable
	31	33	35	40	44
less Interest payable	7	7	10	12	16
Profit before tax	24	26	25	28	28
less Taxation	7	7	6	9	9
	17	19	19	19	19
Extraordinary items	2		1		1
	19	19	20	19	20
Dividends	5	6	6	7	8
Retained earnings	14	13	14	12	12

Group consolidated balance sheets (fm)

1988 1989 1990 1991 1992

Ordinary share capital

(£1 par value) 45 45 45 45 45

74	87	101	113	125
119	132	146	158	170

Reserves

16% unsecured loan

(1990-93)	20	20	15	10	5
10% debenture (1993)	18	18	18	18	18
Bank loan-variable
rate (note 1)		4	11	29	41
Capital employed	£157	£174	£190	£215	£234
Land, buildings, plant etc. (note 2)	87	106	112	112	116
Long-term investments	8	8	8	8	9
Fixed assets	95	114	120	120	125
0		96	100	109	125
Debtors	59	60	74	91	111
Cash	9	23	16		15
Current assets	148	179	190	200	251
Creditors	34	47	49	55	61
Tax payable	9	8	10	11	12
Dividends	5	6	6	7	8
Short-term loans	38	58	55	32	61
Current liabilities	86	119	120	105	142
Net assets employed	£157	£174	£190	£215	£234

Note 1: This loan is renegotiated each year, the current date for repay- ment is 1996.

Note 2: Capital expenditure has been contracted amounting to £30m for the year 1993.

1988	1989	1990	1991	1992
380	420	378	370	320
10	10	14	15	18

Average share price Ragidem (pence)

Average P/E ratio for the industry

You are required to:

Prepare a report commenting on the main features of the financial performance of Ragidem pk.

(i) Present suitable ratios which highlight the main features of the financial performance of Ragidem pk.

(ii) Prepare a report commenting on these features.

Reference no: EM13907561

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