考文垂大学 商科课程 财务报表分析 比率分析课堂问题

M17EFA

Ratioanalysis

Seminarquestions

Exercise1-LLimited

ThedirectorsofLLtdappointedanewsalesmanagertowardstheendof20X2.Thismanagerdevisedaplantoincreasesalesandprofitbymeansofareductioninsellingpriceandextendedcredittermstocustomers.Thisinvolvedconsiderableinvestmentinnewmachineryearlyin20X3inordertomeetthedemandwhichthechangeinsalespolicyhadcreated.

Thefinancialstatementsfortheyearsended31December20X2and20X3areshownonthenextpage.Thesalesmanagerhasarguedthatthenewpolicyhasbeenaresoundingsuccessbecausesalesand,moreimportantly,profitshaveincreaseddramatically.

Youarerequiredtoexplainwhetheryoubelievethattheperformancefortheyearended31December20X3,andthefinancialpositionatthatdatehaveimprovedasaresultofthenewpoliciesadoptedbythecompany.Youshouldsupportyouranswerwithappropriateratios.

Incomestatement

20X2

20X3

£000

£000

SalesRevenue

Costofsales

900

(360)

2,800

(1,680)

Grossprofit

Sellingexpenses

Baddebts

Depreciation

Interest

540

(150)

(18)

(58)

(12)

1,120

(270)

(140)

(208)

(192)

Netprofit

Retainedearningsb/f

302

327

310

629

Retainedearningsc/f

629

939

Statementoffinancialposition

20X2

20X3

£000

£000

£000

£000

Noncurrentassets

Factory

Machinery

450

490

441

1,791

940

2,232

Currentassets

Inventory

Receivables

Bank

30

83

12

238

583

-

125

821

1,065

3,053

Equityandreserves

Sharecapital

Retainedearnings

300

629

328

939

929

1,267

NoncurrentLiabilities

Longtermborrowings

100

1,600

Currentliabilities

Payables

Bank

36

-

175

11

36

186

1,065

3,053

Exercise2-Robovertplc(December2005examupdated)

YouworkforRobovertplc.YouhavebeenaskedtoprepareareportforyoursupervisoronhowtheperformanceofRobovertplccompareswithothersimilarcompanies.Yoursupervisordoesnotwishtoreadalengthyreportandhasindicatedthat‘aboutacoupleofpagesidentifyingclearlythemainissues’arerequired.

YouobtainthemostrecentfinancialstatementsofRobovertplcandthreeofitscompetitors.Usingtheseyoucalculatethefollowingratiovalues:

Robovertplc

Competitor

A

B

C

1

Netprofittototalassets

6.3%

9.8%

22.6%

19.3%

2

Netprofittosales

5.0%

8.0%

18.5%

13.5%

3

Salestototalassets(times)

1.25

1.22

1.22

1.43

4

Grossprofittosales

20.0%

17.0%

28.5%

22.5%

5

Administrativeexpensestosales

12.0%

7.5%

8.0%

7.5%

6

Distributioncoststosales

3.0%

1.5%

2.0%

1.5%

7

Salestonon-currentassets(times)

1.67

1.61

1.57

1.75

8

Salestocurrentassets(times)

5.00

5.00

5.41

7.69

9

Currentratio

1.33

1.25

1.37

0.93

10

Acidtestratio

0.90

0.81

1.07

0.71

11

Inventorytosales

6.5%

7.0%

4.0%

3.0%

12

Tradereceivablestosales

11.5%

9.5%

7.0%

5.0%

13

Cashtosales

2.0%

3.5%

7.5%

5.0%

Requirementforquestion

(a) PrepareareportanalysingtheperformanceofRobovertplcforyoursupervisor.Yourreportshould:

CompareRobovertplc’sprofitability,assetsutilisationandliquiditywithitscompetitors 16

MakeclearrecommendationsonhowtheperformanceofRobovertplccouldbeimproved 4

Indicateanylimitationsofyouranalysis. 4

(b) Discusstheissueofcomparabilitywithinthecontextofratioanalysis.Whyiscomparabilityimportantandhowcancomparabilitybeenhanced? 6

Exercise3–LoxleeLtd(CIPFAAATFTFRexam–June2008Question4)

Afriendofyoursworksforacompanywhichhasjusttakenoveranothercompany,LoxleeLtd.YourfriendhasbeensuppliedwiththefollowingperformanceindicatorsforLoxleeLtdforitsmostrecentthreefinancialyears.YourfriendwillshortlybemeetingwithhisbosswhowantsananalysisofthepastperformanceandfutureprospectsforLoxleeLtd.Yourfriendhasaskedyouforhelp.

Financialyear

2005

2006

2007

1

Profitaftertaxtototalassets

13.0%

15.4%

20.4%

2

Profitbeforetaxtosalesrevenue

12.0%

12.3%

15.1%

3

Turnovertototalassets(times)

1.54

1.78

1.93

4

Grossprofittosalesrevenue

20.0%

20.0%

22.9%

5

Administrativeexpensestosalesrevenue

6.0%

5.3%

4.9%

6

Distributioncoststosalesrevenue

2.0%

2.3%

2.9%

7

Profitaftertaxtosalesrevenue

8.4%

8.7%

10.6%

8

Salesrevenuetonon-currentassets(times)

2.00

2.40

2.80

9

Salesrevenuetocurrentassets(times)

6.76

6.82

6.25

10

Currentratio(to1)

1.23

1.26

1.22

11

Quick/acidtestratio(to1)

0.90

0.91

0.91

12

Inventorytocostofsales

4.0%

4.0%

4.0%

13

Tradereceivablestosalesrevenue

8.0%

8.3%

11.4%

14

Cashtosalesrevenue

2.8%

2.3%

0.6%

Requirements

Preparenotesforyourmeetingwithyourfriendwhich:

Provideadetai