Provide a report based on the analysis

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Reference no: EM132274357

Question 1:

The following information is provided for Bright Creative Ltd.

 

2012

'000

2013

'000

2014

'000

Net assets

1000

1100

1200

Total liabilities

1200

1600

1500

Paid-up capital ($1)* No. of Ordinary Shares

800

800

800

Retained earnings & reserves

200

300

400

Profit before interest and tax

270

294

325

Interest

120

160

160

Taxation

45

40

41

Dividends per share

$0.05

$0.06

$0.07

Average market price per share

$1.08

$1.12

$1.23

* All share initially issued at $1.

A. Calculate for each year:
I. Gearing ratio;
II. Earnings per share;
III. Price earnings ratio (P/E);
IV. Dividend yield;
V. Dividend pay-out ratio;
VI. Return on owner equity for 2013 and 2014.

B. Discuss any significant trends or anomalies for each of the Ratios above (i.e. I, II, III, IV, V and VI).

Question 2:

The following Ratios are abstracted from the financial reports of Western Digi Ltd, which appear to have a concern with liquidity and efficiency for the years 2012 through to 2014.

Ratio

2012

2013

2014

Industry

Average 2014

Current Ratio

1.6:1

1.8:1

1.9:1

2.1:1

Acid Ratio

1.2:1

1.1:1

0.9:1

1.1:1

Inventory turnover period

31.3 days

33.4days

37.9days

27.4days

Average settlement period for debtors

47.3 days

45.2days

41.3days

45.1days

Average settlement period for creditors

74.5days

70.2days

66.5days

62.1days

Working capital cycle (days)

4.1days

8.4days

12.7days

10.4days

You as the Management Accountant of Western Digi Ltd, are requested by the CEO to provide a report based on the above analysis (current Tax Rates can be found on the Inland Revenue Department).

Verified Expert

In the given assignment, we were required to determine various financial ratios and do a trend analysis of significant financial figures. Apart from this, we were also required to compare some financial ratios for the past three years with the industrial average figures.

Reference no: EM132274357

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len2274357

4/3/2019 11:04:01 PM

Hi there, Please read the marking scheme carefully if you don't really understand the assignment please tell me. You need to do assignment as per marking criteria and requirements mention in question please do let me know. Thanks

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