1. Let us assume that you will be working as a financial analyst, and you usually use ratios for analysis. What are those specific issues that may arise using financial position ratios to analyse the financial health of a specific company? Explain.

Question 2. In its financial information ELKOS reported the following key financial figures and ratios for the years ended in 2010 and 2009. 2010 2009 Group revenue ( m) (excluding VAT) 56,910 53,898 Group operating profit (fm) 3,412 3,086 Group profit before tax (m) 3,176 2,917 Return on capital employed (ROCE) 12.10% 12.80% Underlying earnings per share (cent) 31.66 28.87 Dividend per share (cent) 13.05 11.96 Required: No Spacing a) Based on this information evaluate the company's profitability over the two years and the reason for the fall in the return on capital employed (ROCE) in 2010 compared to 2009. Calculate any ratios that you consider necessary for your evaluation based on the available information. For the ratios, show the basis of your calculation. (6 marks)