Activity 1: Calculations XYZ ple Statement of financial position as at (mathrm(E)^prime mathrm(m)) Assets Non-current assets: multicolumn(3)(|c|)( XYZ ple Statement of Profit or Loss for the periods ) & 31 / 12 / 2021 & 31 / 12 / 2022 Sales revenues & 6,200 & 7,000 Cost of sales & (3.120) & (4.700) Gross profit & 2,080 & 2,300 Distribution expenses & (640) & (700) Administration expenses & (520) & (400) Other expenses & 0,000 & (500) Operating profit & 620 & 700 Interest on borrowings & (100) & (100) Profit for the period & 620 & 600 Taxation & 210 & (250) Profit for the year & 310 & 350 Assume that dividends of £ 201 mathrm(~m) and £ 382 mathrm(~m) were paid in 2021 and 2022, respectively. And the share prices were £ 3.5 in 2021 and £ 4.6 in 2022. Required: Calculate and interpret the following: ROSF, Dividend yield, EPS and PE ratios mathrm(XYZ) ple Statement of financial position as at 31 / 12 / 2021 31 / 12 / 2022 Assets Non-current assets: Property, Plant & Equipment Goodwill Total non-current assets Current assets: Cash & cash equivalents Trade Receivables Inventory Total current assets Total assets Equity & Liabilities Equity capital Share capital (FO 50 per share) Share premium Retained earnings Total equity Liabilities Non-current liabites 10 % long term loan Total non-current liabites Current liabites Short-term borrows Trade payables Total current liabites Total liabilities 1.800 1.970 Total Equity & Liability 4.000 4.370

Question

Activity 1: Calculations XYZ ple Statement of financial position as at (mathrm(E)^prime mathrm(m)) Assets Non-current assets: multicolumn(3)(|c|)( XYZ ple Statement of Profit or Loss for the periods ) & 31 / 12 / 2021 & 31 / 12 / 2022 Sales revenues & 6,200 & 7,000 Cost of sales & (3.120) & (4.700) Gross profit & 2,080 & 2,300 Distribution expenses & (640) & (700) Administration expenses & (520) & (400) Other expenses & 0,000 & (500) Operating profit & 620 & 700 Interest on borrowings & (100) & (100) Profit for the period & 620 & 600 Taxation & 210 & (250) Profit for the year & 310 & 350 Assume that dividends of £ 201 mathrm(~m) and £ 382 mathrm(~m) were paid in 2021 and 2022, respectively. And the share prices were £ 3.5 in 2021 and £ 4.6 in 2022. Required: Calculate and interpret the following: ROSF, Dividend yield, EPS and PE ratios mathrm(XYZ) ple Statement of financial position as at 31 / 12 / 2021 31 / 12 / 2022 Assets Non-current assets: Property, Plant & Equipment Goodwill Total non-current assets Current assets: Cash & cash equivalents Trade Receivables Inventory Total current assets Total assets Equity & Liabilities Equity capital Share capital (FO 50 per share) Share premium Retained earnings Total equity Liabilities Non-current liabites 10 % long term loan Total non-current liabites Current liabites Short-term borrows Trade payables Total current liabites Total liabilities 1.800 1.970 Total Equity & Liability 4.000 4.370

Answer 1

(All Answers are subject to accuracy of equations computed above based on parameter given in explanation section.)- For ROSF: ROSF _2021 , ROSF _2022 - For Dividend Yield _2021 : Dividend Yield_2021, Dividend Yield_2022 - Expected EPS figures for 2021 and 2022 are EPS _2021, EPS _2022 respectively.- For P/E ratios for 2021 and 2022: are PE_Ratio _2021 and PE_Ratio _2022 will be calculated.

Answer 2

## Step 1: Calculate ROSF(Return On Shareholders' Funds)The formula to calculate the Return On Shareholders' Funds (ROSF) is:### **ROSF =

* 100%**For 2021, Net Profit After Tax is 310 andShareholders’ Funds = Share capital + Share premium + Retained earnings = 1,480 + 220 + 500 = 2,200So, ROSF for 2021 =

For 2022,Net Profit After Tax is 350 andShareholders’ Funds = 1,480 + 220 + 700 = 2,400.So, ROSF for 2022 =

## Step 2: Calculate Dividend YieldThe formula to calculate the Dividend Yield is:### **Dividend Yield =

*100%**For 2021, Dividends per share = 201. Price per share =

So, Dividend Yield =

For 2022, Dividends per share = 382. Price per share =

Dividend Yield =

## Step 3: Calculate Earning Per Share(EPS)The formula to calculate Earning Per Share(EPS) is:### **EPS =

**For both the years Shareholders = Common shareholders = Share capital + Share Premium = 1,480 + 220 = 1,700For EPS calculation Earnings available for common shareholders = Net Profit For 2021, EPS =

For 2022, EPS =

## Step 4: Calculate Price Earnings (PE) Ratios)The formula to calculate PE_ratio is:### **P/E_ratio = \(\frac{Market price of the share}{Earnings per share (EPS)}\)**Given Market price for 2021 = £3.5 , for 2022 = £4.6For 2021: PE_Ratio = \( \frac{3.5}{EPS(2021)} \)

For 2022: PE_Ratio = \( \frac{4.6}{EPS(2022)} \)

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