Financial Statement Analysis (35 Marks) Antigoneia Plc is a clothing retail company which trades solely through its stores. The company has expanded this year and now has 50 shops spread across the UK compared to 45 in 2016. Expansion was financed by additional borrowings. The new shops brought the total retail space operated by the company to 34,700 square metres in the current year compared to 31,750 square metres in the year to 30 April 2015. The company employed 400 retail store staff in the current year compared to 355 in the last financial year. Statement of comprehensive income for the year ending 31 December 2016 2015 m m Sales Revenue 28,950 28,732 Cost of Sales 20,625 19,250 Gross Profit 8,325 9,482 Operating Expenses 5,143 4,852 Profit before interest and tax 3,182 4,630 Interest payable 750 460 Profit before tax 2,432 4,170 Taxation 833 1,045 Profit after tax 1,599 3,125 Statement of Financial Position as at 31st December 2016 m 2015 m Non-current assets Property plant and equipment 29,889 25,370 Current assets Inventories Trade receivables Cash at bank and in hand 2,870 1,225 2,650 6,745 36,634 2,350 1,000 1,125 4,475 29,845 Total assets Equity Ordinary share capital (50p shares) Share premium account Retained Earnings 10,000 2,000 4,424 16,424 10,000 2,000 3,325 15,325 Non-current liabilities Long-term loans 15,240 10,000 1,030 Current liabilities Bank overdraft 1,820 1,560 Trade payables 2,225 1,930 Taxation payable 925 4,970 4,520 Total equity and liabilities 36,634 29,845 Senior management is interested in understanding the impact of the expansion on profitability and financial health of the business. You have been approached to provide such analysis. Required a) Calculate 10 ratios (see below) that can help illustrate the financial performance and financial position of the business in the years ended 31st December 2016 and 2015. The ratios should include the following: 3 profitability ratios 2 liquidity ratios 2 gearing ratios 3 efficiency ratios (20 marks) b) Using the information in the question and the ratios you have calculated, discuss the financial performance and position of the company. (10 Marks) c) What are the limitation of such ratio analysis (5 marks) Total (35 marks) 7