B13.1 [S]

The following financial statements relate to Hope plc:

The directors have recommended a dividend of 36.7 pence per share in respect of Year 4, to be paid following approval at the next annual general meeting

Required

(a) Calculate ratios which measure:
(i) liquidity and the use of working capital;
(ii) management performance; and (iii) gearing.

(b) Explain how each ratio would help in understanding the financial position and results of the company.

(c) The market price is currently 1,100 pence per share. Calculate ratios which are useful to investors.

Transcribed Image Text:

Revenue Cost of sales Income statement (profit and loss account) for the year ended 30 June Year 4 Gross profit Administration and selling expenses Operating profit Debenture interest Profit before taxation Taxation Profit for equity holder 000s 000s 6,200 (2,750) 3,450 (2,194) 1,256 (84) 1,172 (480) 692