Set out in Figure 16.10 are summarized balance sheets and income statements for F Co. for 20X1 and 20X2. You are required to:

Figure 16.10

a. prepare a table of ratios, covering all aspects of interpretation as far as the information allows, for each of the two years;

b. consider the following statement: ‘The situation of the business has got worse, and anyone owning ordinary shares in F Co. would be advised to sell them as soon as possible’. Write a report explaining fully whether you agree or disagree and why.

Transcribed Image Text:

Summarized balance sheets at year end (Em) Non-current assets Tangible not yet in use - in use Investments Loan redemption fund Current assets 20X2 20X1 49 41 295 237 344 278 1 1 1 346 Inventory Receivables - trade 4 -other Bank Cash Payables - due within one year - trade - other Net current liabilities Total assets current liabilities Payables due between one and five years 42 42 8 22 54 4 4 88 60 87 147 - 93 253 61 47 41 280 56 8525 60 112 172 Provisions 4 Net assets 188 Capital and reserves Ordinary shares of 0.1 each 19 Preference shares of 1 each 46 Share premium 1 Retained earnings 122 188 3 8