Calculate the following for Company AZ to two decimal places: dividend per share.
Calculate the following for Company AZ to two decimal places: dividend cover.
Describe the kind of investor who may choose to invest in Company AZ rather than Company BY after examining these ratios. Give a reason for your answer.
Explain how the investor’s decision might be different if Company AZ was paying interest of $12\%$ per annum on a long-term loan of $\$440\,000$, while Company BY had interest cover of $9$ times. Support your answer with relevant calculations.
Suggest two investment ratios that a prospective investor might use, other than dividend per share and dividend cover.
Advise the directors whether or not they should use ratio analysis to assess performance. Justify your answer.
Discuss whether the external auditors of a company would be interested in the ratios of a business.
State two differences between external and internal auditors.