Hi Professor,

Need some help here.

Thanks in advance.

Part 1

(All figure in Pound) No Formula Year 2021 Year 2022 1 (Sales-Cost of sales) 30.000 8,000 40,000 9,000 Sales 30,000 x 100 = 73% 40,000 x 100 = 78% 1i Net Profit 16,000 18,500 Sales 30,000 x 100 = 53% 40,000 x 100 = 46% 111 Current Assets 30,200 41,000 Current Liabilities 16,700 1.8 times 30,800 = 1.3 times IV . Current Assets-Inventory 30.200 4,900 41,000 13,700 Current Liabilities 16,700 = 1.5 times 30,800 = 0.9 times V. Trade receivables 8,800 11,600 Sales x 365 days 30,000 x 365 days = 107.1 days 40,000 x 365 days = 105.85 days V1. Retained Earning 16,000 18,500 No of shares(units) 20,000 units = 80 pence 20,000 units = 93 pence V11. Share Price 2.50 = 3.1 times 3.30 = 3.5 times Earning per share (EPS) 0.80 0.93 V111. Dividend 0.12 = 4.8% 0.18 = 5.5% Yield (share price per share) 2.50 3.30i. Accounting Rate of return Cafe Year cash flow 0 -$ 82,000.00 1 f 20,000.00 2 E 30,000.00 3 E 40,000.00 E 40,000.00 E 50,000.00 f 18,000.00 (scrap value) Total revenue $180,000.00 Total cost f 64,000.00 Profit $116,000.00 Disco Year cash flow $ 82,000.00 1 E 30,000.00 2 f 30,000.00 E 40,000.00 4 E 50,000.00 E 30,000.00 E 22,000.00 (scrap value) Total revenue $180,000.00 Total cost E 60,000.00 Profit $ 120,000.00 Average initial investn $ 100,000.00 E 104,000.00 (initial investment + residual value) 2 2 E 50,000.00 E 52,000.00 Accounting rate of ret E 23,200.00 E 24,000.00 $ 50,000.00 x100 f 52,000.00 x100 46.40% 46.15%ii. Payback period Year Cafe Disco -E 82,000.00 E 82,000.00 f 20,000.00 f 30,000.00 E 30,000.00 E 30,000.00 E 40,000.00 f 40,000.00 $ 40,000.00 $ 50,000.00 E 50,000.00 E 30,000.00 Cafe = 2,000-20,000-30000)/40,000)) 2+(32,000/40,000) = 2.8 years Disco = 2,000-30,000-30,000)/40,000)) = 2+(22,000/40,000) = 2.55 years