Analysis and communication of accounting information — Accounting 9706 AS & A Level Question & Worked Solution

(a(i))[5]

Calculate the income gearing ratio, giving your answer to two decimal places.

(a(ii))[5]

Calculate the gearing ratio, giving your answer to two decimal places.

(a(iii))[5]

Calculate the dividend cover, giving your answer to two decimal places.

(a(iv))[5]

Calculate the price earnings ratio, giving your answer to two decimal places.

(b(i))[2]

Prepare an extract from the income statement for the year ended 31 August 2017, beginning with the profit from operations.

(b(ii))[2]

Prepare the equity and non-current liabilities section of the statement of financial position at 31 August 2017.

(c(i))[4]

Calculate the same ratios as in part (a) at 31 August 2017, giving answers to two decimal places.

(c(ii))[8]

Assess the effect of the new debenture issue on these ratios.

(d)[4]

Discuss two disadvantages for the company arising from the issue of the debentures.

Analysis and communication of accounting information — practice question