Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

please provide the solution of this question Your parents are considering investing in David Jones Lid (DJS) shares. They ask you, an accounting expert, to

please provide the solution of this question

image text in transcribed
Your parents are considering investing in David Jones Lid (DJS) shares. They ask you, an accounting expert, to make an analysis of the entity for them. An extract from the five-year summary included in David Jones Ltd 2013 annual report is presented below. All figures are in thousands. DAVID JONES LTD Five-year summary 2009-2013 (S'ooo) 2013 2012 2011 2010 2009 Sales $1 845 012 $1 867 817 $1 961 744 $2 053 087 $1 985 490 Gross profit 706 144 699 830 767 269 815 729 786 146 Department store-EBIT 99 532 104 995 199 003 204 798 184 377 Financial services-EBIT 49 466 49 418 47 707 44 379 41 274 Total EBIT 148 998 154 413 246 710 249 177 225 651 Profit after tax 101 554 101 103 168 139 170 766 156 522 Total assets 1 237 785 1 240 897 1 214 550 1 194 921 1 124 674 Total liabilities 436 689 465 193 429 070 450 683 439 832 Total equity 801 096 775 704 785 480 744 238 684 842 Basic earnings per share (cents) 19.2 19.4 33 34 31.5 Dividends per share (cents) 17 17.5 28 30 28 Required a. Prepare a 5-year trend (horizontal) analysis of sales, gross profit, department store EBIT, financial services EBIT and profit after tax using 2009 as the base year. Comment on the significance of the trend results. b. Calculate the following for 2013 and 2012: 1. Debt to total assets ratio. 2. Profit margin. 3. Asset turnover. 4. Return on shareholders' equity. 5. Dividend payout. C. How would you evaluate David Jones Lid's profitability, solvency and investment potential

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Mastering 21st Century Enterprise Risk Management

Authors: Gregory M Carroll

1st Edition

1483510441, 9781483510446

More Books

Students also viewed these Accounting questions