Scribd Logo
Upload

Welcome to Scribd!

  • Pretation

    Uploaded by

    Farman Shaikh
    9 views1 page
    Bengal Co. saw a 48% increase in revenue but only a 20% increase in net profit due to a 28.6% rise in taxes from the previous year likely due to underpayment. While return on capital employed decreased from 39% to 32% with the purchase of assets and new loan notes increasing capital, interest charges rose significantly from £100,000 to £650,000 due to the additional notes, decreasing profits available to shareholders. Gross profit margins increased from 40% to 42%, indicating effective cost handling.

    Original Description:

    inter

    Original Title

    pretation

    Copyright

    © © All Rights Reserved

    Available Formats

    RTF, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Report this Document
    Bengal Co. saw a 48% increase in revenue but only a 20% increase in net profit due to a 28.6% rise in taxes from the previous year likely due to underpayment. While return on capital employed decreased from 39% to 32% with the purchase of assets and new loan notes increasing capital, interest charges rose significantly from £100,000 to £650,000 due to the additional notes, decreasing profits available to shareholders. Gross profit margins increased from 40% to 42%, indicating effective cost handling.

    Copyright:

    © All Rights Reserved
    Download as RTF, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    9 views1 page

    Pretation

    Uploaded by

    Farman Shaikh
    Bengal Co. saw a 48% increase in revenue but only a 20% increase in net profit due to a 28.6% rise in taxes from the previous year likely due to underpayment. While return on capital employed decreased from 39% to 32% with the purchase of assets and new loan notes increasing capital, interest charges rose significantly from £100,000 to £650,000 due to the additional notes, decreasing profits available to shareholders. Gross profit margins increased from 40% to 42%, indicating effective cost handling.

    Copyright:

    © All Rights Reserved
    Download as RTF, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 1

    Bengal Co.

    (a)it is correct that revenue has increased by 48% during the year but net profit for the
    year is only increased by 20%.As we are sseing that in the year tax charge has increased
    by 28.6% from previous year to 42.9% of the profit before tax,this may be due to the
    underpayment of tax in the previous year.

    It is worth looking at ROCE as bengal company has significantly increased the capital
    employed by 13m by purchasing tangibles,intangibles and issued new 8% loan notes in
    the year.ROCE in the year ended 20X0 and 20X1 are 39% and 32%,The decrease of 7% is
    due to the additional capital employed in the year.

    The increase of loan notes have significance to sharehpolders.the interest charges for
    the year has been increased from 100,000 to 650,000.This is becauese the issue of
    additional loan notes and this had lead to decrease in profits available for shareholders.
    Gross profit for the year 20X0 and 20X1 are 40% and 42% respectively and it means that
    bengal co. is handling its cost effectively.

    You might also like