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

Analysis and communication of accounting information — practice question

J plc started trading on 1 January 2016.
(a)[5]

Draw up the equity and liabilities part of the statement of financial position as at 31 December 2018.

(b(i))[2]

Calculate, to two decimal places, the dividend cover for the year ended 31 December 2018.

(b(ii))[2]

Calculate, to two decimal places, the gearing ratio for the year ended 31 December 2018.

(b(iii))[3]

Calculate, to two decimal places, the price earnings ratio for the year ended 31 December 2018.

(c)[8]

Analyse how J plc performed financially.

(d)[5]

Advise the directors on whether they ought to pay the extra cash dividend. Support your answer by weighing up the other options open to the directors.

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