Accounting 9706 · AS & A Level · Analysis and communication of accounting information

Analysis and communication of accounting information — practice question

Winterbottom plc and Ramsey plc are two broadly similar trading businesses that have been trading successfully for many years.
(a(i))[10]

Calculate income gearing for both companies, giving answers to two decimal places.

(a(ii))[10]

Calculate earnings per share for both companies, rounding to two decimal places.

(a(iii))[10]

Calculate the price earnings ratio for both companies, giving answers to two decimal places.

(a(iv))[10]

Calculate the dividend yield for both companies, to two decimal places.

(a(v))[10]

Calculate the dividend cover for both companies, to two decimal places.

(b)[10]

Analyse the performance of both companies against the industry averages.

(c)[5]

Advise Alfredo which company he should invest in. Justify your answer.

Worked solution & mark scheme

This 65-mark question has a full step-by-step worked solution and mark scheme. One marking point: For W, 300/1720 \times100 = 17.44%.

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