The summarised financial statements of Swordfish plc for the three years ended 31st December 2006, 2007 and 2008 are shown below, in millions of pounds:

	2006	2007	2008
INCOME STATEMENT
Sales turnover (i.e. Revenue)	360.0	400.0	450.0
Operating Income (i.e. Operating Profit)	28.8	33.6	40.5
Interest (i.e. Finance costs)	(1.4)	(1.8)	(3.5)
Earnings before tax (i.e. Profit before tax)	27.4	31.8	37.0
Taxation	(8.2)	(9.6)	(11.0)
Net Income (i.e. Profit for the year)	19.2	22.2	26.0
BALANCE SHEET
ASSETS
Total Current Assets	80.0	116.0	171.0
Net Fixed Assets	40.0	44.0	54.0
Total Assets	120.0	160.0	225.0
DEBT & EQUITY
Total Current Liabilities	50.0	74.6	115.8
Long Term Debt	20.0	33.0	50.0
Equity
- Common Stock (i.e. Share Capital)	20.0	20.0	20.0
- Retained Earnings	30.0	32.4	39.2
Total Liabilities & Equity	120.0	160.0	225.0

The companys common stock consists of 40 million ordinary shares with a face value of 50 pence each. The share price at the end of each of the last three years was as under:

	2006	2007	2008
Market price of share	240 pence	333 pence	455 pence

Required

(a) Does the Operating return on assets (OROA) ratio of Swordfish plc indicate that the managers are generating adequate operating profits on the assets? Analyse the apparent reasons for the variation in the OROA ratio over the three years by breaking the ratio down into its two component ratios.

(b) Assess whether the firm is providing value for shareholders, using the following additional ratios:

• Return on equity
• Earnings per share
• Price/Earnings ratio
• Price/Book ratio