Pitted Prunes plc merged with Rosy Plums plc and changed its name to Pitted Rosy Plums plc in June 1987. The figures included in the accounts for the year ended 31 December 1987 included the results of both companies from 1 January 1987.

The financial highlights printed in the annual report showed:

The five-year review showed:

Required

(a) Explain the current requirements for a company to produce a five year summary with its annual report and the circumstances in which it may be necessary to restate the actual figures.

(b) Discuss how historical summaries may be of interest and use to an investor or potential investor. (5 marks)

(c) Discuss the adequacy of the five year historical summary produced for Pitted Rosy Plums plc and the minimum content that you consider desirable. (10 marks)

Transcribed Image Text:

1987 1986 000 000 Turnover Pitted Prunes plc 46434 43354 Rosy Plums plc 110420 78050 156854 121404 Profit before taxation Pitted Prunes plc 4336 4171 Rosy Plums plc 2019 1144 6355 5315 Shareholders' funds 38061 35772 Earnings per ordinary share Dividends per ordinary share (net) Pence per share 19.6 16.80 5.9 5.12