Analyse the economical performance and monetary position, Financial Accounting

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The statement of comprehensive income for the year ended 31 December 2009 and its comparative is shown below:

2009

2008

$m

$m

Revenue

1,430

1,022

Cost of sales

(1,058)

(705)

Gross profit

372

317

Administrative expenses

(74)

(62)

Distribution costs

(158)

(100)

Finance costs

(60)

(30)

Share of profit of associate

80

-

Profit before tax

160

125

Income tax expense

(40)

(33)

Profit for the year

120

92

Other comprehensive income:

Revaluation gain on property, plant and equipment

45

15

Gains on Available for sale investments

16

6

Tax effects of other comprehensive income

(14)

(5)

Other comprehensive income for the year, net of tax

47

16

Total Comprehensive income for the year

167

108





Required:

(a) Analyse the economical performance and monetary position of KER for the year to 31 December 2009 and comment on the Chairman's claims on growth (8 marks are available for the calculation of relevant ratios).

(b) Diversity in accounting policies and estimates can influence the comparison of financial statements of two or more entities. Explain three examples of where such differences could affect comparability between entities.


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