7.2 Tamalanplc is a retail
chain with 160 stores and 14,000 employees. Its financial statements for 2008
are shown below:
|
Income |
2008 |
2007 |
|
£m |
£m |
|
|
Turnover |
1,021.5 |
847.4 |
|
Cost of sales |
-855.3 |
-710.4 |
|
Gross profit |
166.2 |
137.0 |
|
Administrative expenses |
-47.9 |
-29.1 |
|
Operating profit |
118.3 |
107.9 |
|
Net interest payable |
-0.9 |
-0.3 |
|
Profit on ordinary activities |
||
|
before |
117.4 |
107.6 |
|
Taxation |
-30.7 |
-33.5 |
|
Profit on ordinary activities |
||
|
after |
86.7 |
74.1 |
|
Dividends |
-33.3 |
-29.3 |
|
Profit retained for the period |
53.4 |
44.8 |
|
Additional information: |
||
|
Earnings per share |
21.3p |
18.4p |
|
There are 440 million shares issued of 10p each |
||
|
Market value of shares |
£1.50 |
£1.40 |
|
Balance |
2008 |
2007 |
|
£m |
£m |
|
|
Fixed assets |
||
|
Intangible |
37.3 |
32.3 |
|
Tangible assets |
167.6 |
132.3 |
|
Investments |
22.5 |
25.7 |
|
227.4 |
190.3 |
|
|
Current assets |
||
|
Inventory |
135.0 |
105.3 |
|
Trade |
22.5 |
20.8 |
|
Cash at bank |
16.2 |
17.8 |
|
173.7 |
143.9 |
|
|
Total assets |
401.1 |
334.2 |
|
Non-current liabilities |
||
|
Long term loans |
14.8 |
13.4 |
|
Provision for deferred taxation |
9.5 |
7.6 |
|
24.3 |
21.0 |
|
|
Current liabilities |
||
|
Trade payables |
159.8 |
149.6 |
|
Total liabilities |
184.1 |
170.6 |
|
Net assets |
217.0 |
163.6 |
|
Equity |
||
|
Share capital |
44.0 |
44.0 |
|
Profit and loss account |
173.0 |
119.6 |
|
Shareholders’ funds |
217.0 |
163.6 |
Calculate sufficient ratios for both 2008 and 2007 to demonstrate the
changes in profitability, liquidity, efficiency, gearing and shareholder return
of Tamalanplc and comment on the most important changes between 2008 and 2007.
7.2
This problem requires you to calculate specific ratios for two
years. You will need to research the type of ratios that make up the
classifications in the question (profitability, liquidity, efficiency, gearing
and shareholder return). Your answer should be structured by showing the name
of the ratio in one column (ROCE for example) then a column for 2008 and a
column for 2007 and both of these columns will contain the percentages or
ratios. REMEMBER – you must show the calculation and you should show 16 ratios.
NOTE: do not forget to “comment on the most important changes between 2008
and 2007” Problem
7.2 Tamalan plc – you will determine 16 ratios (if you don’t have 16 then you
left something out) that demonstrates changes in profitability, liquidity,
efficiency, gearing and shareholder return. Research the text because these
ratios are defined. For example:
Gross profit/Sales xx.x/xx.x = xx.x% xx.x/xx.x = xx.x% Note – for
each year use a column format for both years.
