Profitability Formula Units 2016 Calculation 2015

Return on capital employed (ROCE) profit from operations % 20.40% 216 21.72%
capital employed 1059

Return on equity pfty % 22.11% 201 23.31%

equity 909

Operating margin profit from operations % 13.5% 216 15.17%

revenue 1600

Profit margin pfty % 12.56% 201 14.33%

revenue 1600

Gross margin gross profit % 30% 480 34.33%

revenue 1600

Expenses margin distribution + admin + finance % 17.44% 279 20%

revenue 1600

Mark up gross profit % 42.86% 480 52.28%

cost of sales 1120
Calculation Note

182
838 ordinary shares + reserves + ncl

172
738

182
1200

172
1200

412
1200

240
1200

412
788
 Utilisation of resources Formula Units 2016 Calculation 2015 Calculation

Revenue to capital employed revenue % 151.09% 1600 143.20% 1200

capital employed 1059 838

NCA turnover revenue x 1.73x 1600 1.79x 1200

nbv of nca 924 670

Net working assets to revenue inv + tr - tp % 6.63% 106 5.67% 68

revenue 1600 1200
 Note

ordinary shares + reserves + ncl

 Financial Formula Units 2016 Calculation

Current ratio ca : cl ratio 1.70 : 1 329 : 194

Liquid (acid test) ratio ca - inv : cl ratio 1.18 : 1 (329 - 100) : 194

TR turnover (avg collection period) tr x 365 days 46 days 200

credit sales 1600

Inventory turnover cost of sales x a year 14.55x a year 1120

(beg inv + end inv) / 2 (54 + 100) / 2

365 days 26 days 365

times a year 14.55

TP turnover (avg payment period) tp x 365 days 61 days 194

credit purchases 1166

Days
Inventory turnover 26
TR turnover 46
72
TP turnover (61)
Cash operating cycle 11
 2015 Calculation Note

2.66 : 1 269 : 101

2.13 : 1 (269 - 54) : 101

x 365 35 days 115 x 365 rounded up

1200

16.42x a year 788

(42 + 54) / 2

23 days 365 rounded up

16.42

x 365 47 days 101 x 365 rounded up

800

Days
23
35
58
(47)
11
 Investment Formula Units 2016 Calculation 2015

Gearing fixed cost capital % 14.16% 150 11.93%

total capital (909 + 150)

Debt to equity ncl + preference shares % 16.50% 150 13.55%

ordinary shares + reserves 909

Interest cover profit from operations x 14.4x 216 18.2x

interest expense 15

Income gearing interest expense % 6.94% 15 5.49%

profit from operations 216

Earnings per share (EPS) pfty - preference share dividend $ $0.50 201 $0.43
no of ordinary shares 400

Price earnings ratio (PER) market price per share x 4.2x 2.1 4.19x
earnings per share 0.5

Dividend per share ordinary dividends $ $0.0875 35 $0.0675

no of ordinary shares 400

Dividend cover pfty - preference share dividend x 5.74x 201 6.37x

ordinary dividends 35

Dividend yield dividend per share % 4.17% 0.0875 3.75%

market price per share 2.1
Calculation Note

100 ncl + redeemable preference shares

(738 + 100) ordinary shares + reserves + fixed cost capital

100
738

182
10

10
182

172
400

1.8
0.43

27
400

172
27

0.0675
1.8
 Tamsin
Income statement for the year ended 31-Dec-15
Step $ $ Calculation
5 Revenue 468,750 262.5k / 56 x 100

3 Cost of sales (262,500) 7 x (40k + 35k) / 2

2 Opening inventory 40,000 35k + 5k
4 Purchases 257,500 262.5k - 40k + 35k
1 Closing inventory (35,000)

6 Gross profit 206,250 468.75k - 262.5k

8 Expenses (124,219) 206.25k - 82031

9 Distribution costs 31,055 124219 x 1/4
10 Administration expenses 93,164 124219 x 3/4

7 Profit from operations 82,031 17.5% x 468750

11 Interest on 10% long term loan (6,724) 82031 / 12.2

12 Profit for the year 75,307 82031 - 6274

 Tamsin
Statement of financial position at
Note Step
gross margin = gp / rev = 44% therefore cos = 56% and rev = 100% 6 Non current assets

inv turnover = cos / avg inv = 7 times Current assets

info 1 Inventory
cos = opening inv + purchases - closing inv 4 Trade receivables
info 8 Cash and cash equivalents
7
rev - cos
9 Assets
gp - profit from operations
distribution costs : administration expenses = 1 : 3 Capital
distribution costs : administration expenses = 1 : 3 13 Capital
2 Profit for the year
operating margin = profit from operations / rev = 17.5% 12 Drawings
11
interest cover = profit from operations / interest expense = 12.2
Non current liabilities
profit from operations - interest on 10% long term loan 3 10% long term loan

Current liabilities
5 Trade payables

10 Capital & liabilities

msin
31-Dec-15
$ Calculation Note
187,500 468.75k / 2.5 nca turnover = rev / nbv of nca = 2.5 times

35,000 closing inv

28,767 32 x (468.75k x 70%) / 365 tr turnover = tr / credit sales x 365 = 32 days
18,774 82541 - 35k - 28767 ca - inv - tr
82,541 45856 x 1.8 current ratio = ca : cl = 1.8 : 1

270,041 187.5k + 82541 nca + ca

133,638 156945 + 52k - 75307 capital + pfty - drawings = 156945

75,307 income statement
(52,000) 52 x 1k info
156,945 270041 - 45856 - 67.24k capital & liabilities - cl - ncl

67,240 info

45,856 65 x 257.5k / 365 tp turnover = tp / credit purchases x 365 = 65 days

270,041 equal to assets