Shareholders’ funds as at 21 March 2009 were £4,376 million (2008: £4,935 million), a reduction of £559 million, primarily as a result of the deterioration of the pension surplus into a deficit, which reduces net assets by £588 million. Gearing, which measures net debt as a percentage of total equity, increased to 38 per cent (2008: 30 per cent) as a result of the pension surplus moving into deficit.

Discussion points

1 How does the summary statement of financial position (balance sheet) reflect the accounting equation?
2 How does the group explain the main changes?

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Non-current assets Inventories Trade and other receivables Cash and cash equivalents Debt Net debt Trade and other payables and provisions Net assets 2009 m 8,425 689 195 627 (2,298) (1,671) (3,040) 4,376 2008 m 8,010 681 206 719 (2,222) (1,503) (2,825) 4,935