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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

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

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AbelVeteran · Tutor for 9 years

Answer

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

Explain

## Step 1: Calculate ROSF(Return On Shareholders' Funds)<br />The formula to calculate the Return On Shareholders' Funds (ROSF) is:<br />### **ROSF = \(\frac{Net\ Profit\ After\ Tax}{Shareholders’\ funds}\) * 100%**<br /><br />For 2021, <br />Net Profit After Tax is 310 and<br />Shareholders’ Funds = Share capital + Share premium + Retained earnings = 1,480 + 220 + 500 = 2,200<br /><br />So, ROSF for 2021 = \(\frac{310}{2200} * 100%\)<br /><br />For 2022,<br />Net Profit After Tax is 350 and<br />Shareholders’ Funds = 1,480 + 220 + 700 = 2,400.<br /><br />So, ROSF for 2022 = \(\frac{350}{240} *100%\)<br /><br />## Step 2: Calculate Dividend Yield<br />The formula to calculate the Dividend Yield is:<br />### **Dividend Yield = \(\frac{Dividends\ per\ share}{Market\ price\ per\ share}\) *100%**<br /><br />For 2021, Dividends per share = 201. Price per share = \(£3.5 \) <br />So, Dividend Yield = \( \frac{201}{3.5} * 100% \)<br /><br />For 2022, Dividends per share = 382. Price per share = \( £4.6 \) <br />Dividend Yield = \( \frac{382}{4.6} * 100% \)<br /><br /><br />## Step 3: Calculate Earning Per Share(EPS)<br />The formula to calculate Earning Per Share(EPS) is:<br />### **EPS = \(\frac{Earnings available for common shareholders}{Weighted Average number of shares}\)**<br /><br />For both the years <br />Shareholders = Common shareholders = Share capital + Share Premium = 1,480 + 220 = 1,700<br /><br />For EPS calculation Earnings available for common shareholders = Net Profit <br /><br />For 2021, EPS = \(\frac{310}{1700} \)<br /><br />For 2022, EPS = \(\frac{350}{1700} \)<br /><br />## Step 4: Calculate Price Earnings (PE) Ratios)<br />The formula to calculate PE_ratio is:<br />### **P/E_ratio = \(\frac{Market price of the share}{Earnings per share (EPS)}\)**<br /><br />Given Market price for 2021 = £3.5 , for 2022 = £4.6<br /><br />For 2021: PE_Ratio = \( \frac{3.5}{EPS(2021)} \)<br /><br />$(Breaking at this point for final computations as EPS is not available yet. This values will be calculated once the figures for EPS is calculated)$<br /><br />For 2022: PE_Ratio = \( \frac{4.6}{EPS(2022)} \)
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