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

Analysis and communication of accounting information — practice question

The summarised statement of financial position for M plc at 31 December 2016 was shown as follows:
(a(i))[8]

Calculate the return on capital employed at 31 December 2016, correct to two decimal places.

(a(ii))[8]

Calculate the earnings per share at 31 December 2016, correct to two decimal places.

(a(iii))[8]

Calculate the price earnings ratio at 31 December 2016, correct to two decimal places.

(a(iv))[8]

Calculate the dividend cover at 31 December 2016, correct to two decimal places.

(a(v))[8]

Calculate the dividend yield at 31 December 2016, correct to two decimal places.

(b)[6]

Prepare a statement presenting the forecast share capital and reserves at 31 December 2017.

(c)[6]

For the year ending 31 December 2017, calculate the following expected ratios to two decimal places: (i) Return on capital employed (ii) Earnings per share

(d)[5]

Advise the directors on whether M plc should invest in the project. Justify your answer.

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