An extract from Oitar ple's Profit and Loss Account for the year ended 30 April 2002 was as follows.

Oitar ple's issued share capital and reserves at 30 April 2002 consisted of:

The market price of the ordinary shares at 30 April 2002 was $30. 

Required

(a) Calculate the following ratios for Oitar plc. 

(i) Interest cover 

(ii) Dividend cover 

(iii) Earnings per share 

(iv) Price earnings ratio 

(v) Dividend yield 

(vi) Gearing

(b) Explain why each of the ratios in (a) is important for investors in ordinary shares in the company.

Oitar ple's accounting ratios at 30 April 2001 were as follows.

(c) Compare the ratios for 2001 with the same ratios in 2002 as calculated in (a), and comment on the changes that you find. 

(d) State, with reasons, any further information you might require and what other documents you might wish to see to enable you to assess the likely future performance of Oitar plc.

Transcribed Image Text:

Operating profit Debenture interest (12%) Ordinary dividend paid and proposed Preference dividend paid and proposed Transfer to General Reserve Retained profit for the year $000 350 120 200 $000 1000 250 750 670 1 1/2 80