You have been employed temporarily by a rich local businessman, Mr Long Pocket, as his assistant. He has been told at the golf club that Sunbright Enterprises plc, a locally based company, would be a good return for his money. The last five years’ results are set out below

You have the following details of dividends over the last five years which have been deducted from the retained earnings.

Required:

Analyse the last five years’ financial results for the company and calculate the appropriate ratios. Present your advice as a short report.

Horizontal analysis, vertical analysis and a calculation of the cash flow ratio are not required.

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Income Statements for the Year Ended 31 December 2008 2009 2010 2011 2012 000 000 000 000 000 1,986 2,001 2,008 2,010 2,012 Revenue Cost of Sales Gross Profit Expenses (including loan interest) Profit before Taxation Taxation Profit for Year (1,192) (1,221) (1,406) (1,306) (1,509) 794 780 602 704 503 (633) (648) (487) (606) (437) 161 132 115 98 66 (32) (26) (23) (19) (13) 129 106 92 79 53