Managing Financial and Information Resources (

Question (1)

Balance Sheet for Fabrique Aérospatiale for the last years All figures in 000s

Assets   2013      2012      2011
Non-current assets
Property plant and equipment   971      626      592
Intangible assets   164      129      124
Investments in associates   84      83      82
Deferred income tax assets   22      21      20
Available-for-sale financial assets   109      93      89
Derivative financial assets   2      2      2
Trade and other receivables   15      8      7
Total non-current assets   1367      962      916
Current assets
Inventories- Stock   154      114      107
Debetors   124      115      112
Available-for-sale financial assets   12
Derivative financial instruments   7      6      2
Financial assets at fair value through profit and loss   74      50      41
Cash and cash equivalents   112      213      228
483      498      490
Assets of disposal group as held-for-sale   21
Total current assets   504      498      490
Total assets   1871      1460      1406

Equity
Capital and reserves attributable to equity holders of the company
Ordinary shares   158      131      131
Share premium   107      66      66
Other reserves   97      44      36
Retained earnings   416      304      261
778      545      494
Minority interest in equity   45      11      11
Total equity   823      556      505
Liabilities
Non-current liabilities (Long Term liabilities)
Borrowings   720      602      578
Derivative financial instruments   1      1
Deferred income tax liabilities   77      57      47
Retirement benefit obligations   29      14      12
Provisions for other liabilities and charges   8      2      1
Total non-current liabilities ( Long term liabilities)   835      676      638
Current liabilities
Creditors   104      78      73
Current income tax liabilities   18      17      71
Borrowings   73      114      103
Derivative financial instruments   3      4      1
Provisions for other liabilities and charges   14      15      15
212      228      263
Liabilities of disposal group classified as held-for-sale   1
Total current liabilities   213      228      263
Total liabilities   1048      904      901
Total equity and liabilities       1871        1460        1406
Number of shares   1580       1310       1310
158.30      99.63       84.28
Share prices

Profit and Loss Account for Fabrique Aérospatiale

Continuing operations 2013 2012 2011

Sales Revenue   1319      702      689
Cost of sales   (484)      (292)      (291)
Gross profit   835      410      398
Distribution costs   (326)      (133)      (141)
Administration expenses   (180)      (65)      (66)
Other income   12      8      7
Other (losses)/gains–net   (1)      0      (6)
Loss on sale of land   (7)      0      0
Operating profit   333      220      192
Finance income   11      10      7
Interest    (51)      (76)      (71)
Finance costs–net   (40)      (66)      (64)
Share of (loss)/profit of associates   (1)      1      1
Profit before income tax   292      155      129
Income tax expense   (91)      (54)      (40)
Profit after tax   201      101      89
Discontinued operations
Profit for the year from discontinued operations   1      1
Profit for the year   202      102      89

Dividends (90) (59) (52)
Retained earnings 112 43 37

Required:

1. Carry out and show the working of the following ratios for your selected companies for the last 3 years

•   Liquidity ratios (4 Marks)
•   Efficiency Ratios (4 Marks)
•   Gearing Ratios (4 Marks)
•   Profitability Ratios (4Marks)
•   Investment Ratios (4 Marks)

2. Write a report to the board of directors analysing the ratio calculated in question (1) above. Compare the results against the last 3 years (20 Marks). Word Limit (800 words)

Template for Question (1) Requirement (1)

Ratio   Calculation for 2013   2013   Calculation for 2012   2012   Calculation for 2011   2011
Profitability Ratios
ROCE   Operating profit / Total capital
=        Operating profit / Total capital
=        Operating profit / Total capital
=
ROE   Profit after tax / Equity capital
= £       Profit after tax / Equity capital
=        Profit after tax / Equity capital
=
GP%   Gross profit / Sales
=        Gross profit / Sales
=        Gross profit / Sales
=
OP%   Operating profit / Sales
= £       Operating profit / Sales
=        Operating profit / Sales
=
Efficiency Ratios
Debtor days   Debtors x 365 / Credit sales
=        Debtors x 365 / Credit sales
=        Debtors x 365 / Credit sales
=
Creditor days   Creditors x 365 / Cost of sales
=        Creditors x 365 / Cost of sales
=        Creditors x 365 / Cost of sales
=
Stock days   Stock x 365 / Cost of sales
=        Stock x 365 / Cost of sales
=        Stock x 365 / Cost of sales
=
Liquidity Ratios
Current ratio   Current assets / Current liabilities
=        Current assets / Current liabilities
=        Current assets / Current liabilities
=
Acid test ratio   Current assets – stock / Current liabilities
=        Current assets – stock / Current liabilities
=        Current assets – stock / Current liabilities
=
Financial Risk Ratios
Gearing ratio   Long term debt / Total capital
=        Long term debt / Total capital
=        Long term debt / Total capital
=
Interest cover    Operating profit / Interest charges
=        Operating profit / Interest charges
=        Operating profit / Interest charges
=
Dividend cover   Profit after tax / Dividend
=        Profit after tax / Dividend
=        Profit after tax / Dividend
=
Investment Ratios
Earning per shares   Net profit after tax/ number of shares       Net profit after tax/ number of shares       Net profit after tax/ number of shares
Price Earning Ratio   Market value per share/Earning per share       Market value per share/Earning per share       Market value per share/Earning per share

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