Question 1

Statements of Comprehensive Income for the Years ended 31 December 2015 and 2014:

Details	2015	2014
Profit Before Interest and Tax	7,900,000	4,500,000
Interest Expenses	450,000	300,000
Profit Before Tax	7,450,000	4,200,000
Taxation	730,000	520,000
Profit After Tax	6,720,000	3,680,000
Dividends Paid	500,000	500,000
Retained Profit	6,220,000	3,180,000

Statements of Financial Position as at 31 December 2015 and 2014

Details	2015	2014
Non- Current Assets (Written down value)	7,350,000	6,600,000
Current Assets:
Inventories	2,900,000	2,300,000
Receivables	6,700,000	3,500,000
	9,600,000	5,800,000
Total	16,950,000	12,400,000

Creditors: Amounts due within one Year:

Details	2015	2014
Trade Payables	2,600,000	2,200,000
Taxation	550,000	450,000
Bank	1,370,000	650,000
	4,520,000	3,300,000
Total Assets Less Current Liabilities	12,430,000	9,100,000

Creditors: Amount due after more than one Year:

Details	2015	2014
10% Debentures (2012-2017)	2,500,000	2,500,000
Total Assets	14,930,000	11,600,000

Capital & Reserves

Details	2015	2014
Share Capital Ordinary Shares of 50c each fully paid	5,000,000	5,000,000
Share Premium	3,500,000	3,500,000
Retained Earnings	6,430,000	3,100,000
Total	14,930,000	11,600,000

Required:

-Calculate the companys ratio for the following

-Potential Shareholders/Investors:

-Return on equity

-Earnings per share

-Dividend cover

-Gearing ratio

-Ratios for Potential Lenders:

-Debt to equity

-Interest cover current ratio

-Acid test