Question
The following statements are cited from Easy Jet Plc. Annual Report 2019. a) Retained earnings have reduced by 26 million. Where any Group company or
The following statements are cited from Easy Jet Plc. Annual Report 2019. a) Retained earnings have reduced by 26 million. Where any Group company or employee benefit trust purchases the Companys equity shares, the consideration paid and any directly attributable incremental costs are deducted from retained earnings until the shares are cancelled or re-issued. Proceeds from re-issue are shown as a credit to retained earnings. b) 98 million of existing finance lease obligations within borrowings in the financial statements were reclassified as lease liabilities. c) The movement in net working capital has decreased by 328 million, driven by a decrease in trade and other payables as a result of timing of invoices, movement in short-term derivative financial instruments and provisions. Required: Relate tothe above statement (1), analyse the possible impacts of retained earnings/profits reduction on Easy Jet Plc, to show your understanding on the role of retained earnings/profits as a major internal source of finance
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