(a) From the information provided ir. the financial statements for Braemar Ltd for 1983 prepare a report to management covering each of the following:

(i) asset utilisation;

(ii) liquidity and solvency;

(iii) profitability.

Include relevant ratios in your report together with comparative figures for 1982.

(b) Identify any additional information which you would wish to obtain in order to clarify any issues raised in the report in (a).

Braemar Ltd Profit and Loss Account for the year ended 31 December 1983

£000 245 150 95 32 24 39 3

36 6

30 16 14

( 8)

6

/982 Sales Cost of sales Gross profit Distribution expenses Administrative expenses Interest payable Profit before tax Corporation tax on profits Profit after tax Dividends paid and proposed Retained profit for year Retained profit brought forward Retained profit carried forward

/983

£000 258 170 88 27 31 30 4

26 8

18 8

10 6

16

(c) From the information provided in the financial statements for Braemar Ltd , together with the additional information given below, prep are a Statement of Sources and Applications of Funds in accorda nce with the requ irements of SSAP 10.
Additional information:
(i) Dep reciation on buildings during the year amounted to £4000.
(ii) Other fixed assets, which had cost £24 000 some years previously were sold in 1983 for £8000. The net book value of these assets at 31 December 1982 was £14000.
(iii) Amo rtisation of development expenditure during 1983 amounted to £4000.
(iv) A 'one for five' right s issue was made du ring 1983 at a price of £I. 70 per share.
(v) An issue of£14000, 10% debenture stock was made during 1983.