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The following information is available: i ) On 1 January 2 0 2 3 Woodbank Ltd acquired a controlling interest in Shaw Co for 5

The following information is available:
i) On 1 January 2023 Woodbank Ltd acquired a controlling interest in Shaw Co for 50
million. It paid for the acquisition through the issue of additional 10% loan notes and
by using some of its cash reserves. Shaw Co was an unincorporated entity and its
results (for three months from 1 January 2023 to 31 March 2023) are included in
Woodbank Ltd's financial statements for the year ended 31 March 2023. There were
no other purchases or sales of non-current assets during the year ended 31 March
2023.
ii) Extracts of the results (for three months) of the previously separate business of
Shaw Co which are included in Woodbank Co's statement of profit or loss for the
year ended 31 March 2023 are:
000
Revenue 30,000
Cost of sales (21,000)
Gross profit 9,000
Distribution costs (2,000)
Administrative expenses (2,000)
Required:
a) Calculate the equivalent ratios for Woodbank Ltd for the year ended 31 March
2023. Shown below are the financial statements of Woodbank Ltd for its most recent two years.
STATEMENTS OF PROFIT OR LOSS FOR THE YEAR ENDED 31 MARCH
Revenue
Cost of sales
Gross profit
Distribution costs
Administrative expenses
Finance costs - loan note interest
Profit before tax
Income tax expense
Profit for the year
STATEMENTS OF FINANCIAL POSITION AS AT 31 MARCH
ASSETS
Non-current assets
Property, plant and equipment
Goodwill
Current assets
Inventories
Trade receivables
Cash and cash equivalents
Total assets
EQUITY AND LIABILITIES
Equity
Equity shares of 1 each
Retained earnings
Non-current liabilities
10% loan notes
Current liabilities
Trade payables
Current tax payable
Total equity and liabilities
2023
2022
'000
'000
b) Calculate, as far as information permits, the equivalent ratios for Woodbank Ltd
for the year ended 31 March 2023 excluding the effects of the purchase of Shaw
Co.
c) Assess the comparative financial performance and position of Woodbank Ltd for
the year ended 31 March 2023. Your answer should refer to the effects of the
purchase of Shaw Co.
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