7 Marks Question 2 For 2004, use the reformatted financial statements below to compute the return on equity. Next compute the five Advanced du Pontratos the spread and the financing impact on retum on equity. (Please do not average the balance sheet numbers.) Briefly identify the activity that is pushing down profitability REFORMATTED CONSOLIDATED INCOME STATEMENT 2,002 2,003 2,004 FOR THE YEAR ENDED 30 JUNE $.000 $.000 $,000 REVENUE AND OTHER INCOME Scheduled revenues 550,991 731,951 924,566 Other revenues 73,059 110,557 149,658 Revenue total 624,050 842,508 1,074, 224 Foreign exchange realised gains 975 628 3,217 Gain on disposal of fixed assets 527 Revenue and other income in total 625,552 843,136 1,077.441 EXPENDITURE Staff costs -78,240 -93,073 -123,624 Depreciation and amortization -59,010 -76,865 -101,391 Amortisation of goodwill -2,342 (Loss) on disposal of fixed assets -29 -323,867 Other expenses -597,922 -409,096 Expenditure in total -461,117 -825,288 -579,063 Operating (Loss) Profit before income tax expense and net finance 164,435 264,073 252,153 expense Income tax benefit (expense) -19,220 -30,155 -24,985 Other comprehensive Income 145,215 239,088 221.998 Net Profit After Tax (NOPAT) 310 5,160 Net Finance Expense after tax (NFEat) -15,387 150,375 COMPREHENSIVE INCOME 206,611 239,398 Page 3 of 11 Question 2. continued REFORMATTED CONSOLIDATED BALANCE SHEET 2,002 $.000 2,003 $.000 2,004 $.000 299,758 10331 11,035 17,125 353,406 14970 16,370 22.788 419,117 14932 19.251 26,440 951,806 1,290,055 1,352,361 1,759,895 44,499 1,576,526 2.100.765 46,779 217,108 61,604 251,328 67.936 338,208 CURRENT OPERATING ASSETS Cash and cash equivalents (Working cash) Accounts receivable Other assets Inventories NON-CURRENT OPERATING ASSETS Intangible assets Tangible assets Total Operating Assets CURRENT OPERATING LIABILITIES Accounts payables Accrued expenses and other liabilities Current tax payable NONCURRENT OPERATING LIABILITIES Provisions for liabilities and charges Deferred income tax liability Accounts payable due after one year Total Operating Liabilities NET OPERATING ASSETS (NOA) CURRENT FINANCIAL ASSETS Financial assets Cash and cash equivalents NON-CURRENT FINANCIAL ASSETS Financial assets Total Financial Assets 49,317 67.833 94,192 18,086 331,290 958,765 5,673 386.438 1,373,457 30,047 530,383 1,570,382 0 599,517 706,812 838,233 599,517 706,812 838,233 Page 4 of 11 REFORMATTED CONSOLIDATED BALANCE SHEET 2,002 $.000 2,003 $.000 2,004 $.000 38,800 5,505 63,291 1,316 80,337 345 CURRENT FINANCIAL LIABILITIES Current maturities of long term debt Short term borrowings Derivative financial instruments NON-CURRENT FINANCIAL LIABILITIES Derivative financial instruments Long term debt Total Financial Liabilities NET FINANCIAL LIABILITIES (NET DEBT) SHAREHOLDERS' EQUITY Called up share capital Share premium account Retained earnings Other reserves TOTAL SHAREHOLDERS' EQUITY 511,703 556,008 -43,509 773,934 838,541 131,729 872 645 953,327 115,094 9,587 553,457 439,230 9,588 553,512 678,628 9,643 560.406 885,239 1,002,274 1,241,728 1 ,455,288