Refer to your answer to Exercise 10.3. Calculate ratios that you believe could be used to interpret the VAS for Buttons Ltd. Explain the purpose of each ratio.

Data from Exercise 10.3:

The following information has been taken from the accounts of Buttons Ltd for the year ended 30 September.

During the year a dividend of £120,000 was announced and paid.

Required:

(a) Prepare a value added statement for Buttons Ltd for the year ended 30 September.

(b) State and comment upon the reasons why a business may present a value added statement to its shareholders in addition to an income statement.

Transcribed Image Text:

Revenue 950,000 (220,000) (160,000) (95,000) (80,000) 395,000 Materials Wages and salaries Other expenses Depreciation Operating profit (45,000) 350,000 Interest Profit before taxation Taxation (110,000) 240,000 Profit for the year