Geoworld Enterprises plc has the following information extracted from its statement of income and payroll systems: .......................................................................................
Question:
Geoworld Enterprises plc has the following information extracted from its statement of income and payroll systems:
....................................................................................... £
Revenue ............................................................. 411, 000,000
Compensation expenses ........................................... 158,000,000
Raw materials used ................................................. 100,000,000
Payments to subcontractors ........................................ 51,000,000
Energy expenses ....................................................... 1,000,000
Depreciation expenses ............................................... 1,000,000
Interest expenses ..................................................... 2,000,000
Taxation expenses ................................................... 16,000,000
Each fulltime employees works double the hours of part time staff.
Dividends paid to shareholders ........................ 3,000,000
Required:
(a) Prepare a value added statement.
(b) Prepare your version of the ratio of the chief executive salary to the median income of other employees. (Note the objective is not to get you to look up the standard form of the calculation but rather to get you to think about the complexities of the calculation and the need for standardization of the system.) Justify your calculation(s).
(c) Would the required information be readily available in the typical information system? If not could such systems be easily modified?
(d) Look at the calculation in (b) above and consider how the CEO could improve their score in the future and whether all those possibilities would be in the interests of shareholders?
Step by Step Answer:
Financial Accounting and Reporting
ISBN: 978-1292162409
18th edition
Authors: Barry Elliott, Jamie Elliott