Question1

In preparing pro forma income statements, describe THREE(3) important procedures for checking the reasonableness of your projections, and explain why the procedures are important for reasonableness checks.(15 marks)

Question2

You are given the following data for Good Company Inc. for 2017, 2018, and 2019 (amounts in thousands).

2017

2018

2019

Net income

RM345

RM402

RM445

Average number of common shares outstanding

135

134

132

Average common shareholders' equity

RM1231

RM964

RM735

Interpret your findings for both ROCE and EPS. In your interpretation, you need to describe and explain the changes of ROCE and EPS over the years. At last, briefly discuss the performance of the company based on your observation