Recycle pic is a listed company which recycles toxic chemical waste products. The waste products are sent to recycle pic from all around the world. You are an accountant (not employed by Recycle pic) who is accustomed to providing advice concerning the performance of companies, on the basis of data which are available from their published financial statements. Extracts from the financial statements of Recycle pic for the two years ended 30 September 2007 are as follows:
Profit and loss accounts - year ended 30 September

Balance sheets at 30 September

Balance sheets at 30 September

You ascertain that depreciation of tangible fixed assets for the year ended 30 September 2007 was ‚¬1200 million. Disposals of fixed assets during the year ended 30 September 2007 were negligible. You are approached by two individuals.
A. Is a private investigator who is considering purchasing shares in Recycle pic. A considers that Recycle pic has performed well in 2007 compared with 2006 because turnover has risen and the dividend to shareholders has been maintained.
B. Is resident in the area immediately surrounding the premises of Recycle pic and is interested in the contribution made by Recycle pic to the general well-being of the community. B is also concerned about the potential environmental effect of the recycling of chemical waste. B is uncertain how the published financial statements of Recycle pic might be of assistance in addressing social and environmental matters.
Required:
Write a full report addressed to A, supported by appropriate ratios.

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2007 Em 3 000 (1 600) Em 2 800 1300) urnover Cost of sales Gross profit Other operating expenses Operating profi Interest payable Profit before taxation Taxation Profit after taxation Proposed dividend Retained profit Retained prolit b/lw Retained profit c/wd (800) 600 (600) 900 100) (200) 400 (150) 250 (200 50 900 950 800 (250) 550 (200) 350 550 900 2007 em 4 100 em Em Tangble fxed assets 3 800 Current assets Stocks Debtors 350 800 50 1 200 500 1 000 Cash in hand 1 550 Current liabilities Trade creditors Taxation payable Proposed dividend 600 150 200 600 250 200 2007 2006 em Em 750 1 700 em Em 50 1 100 Bank overdra Net current (kabilitiesyassets Long-term loaris (repayable 2009) 150) 1000) 2950 100 1.000) 2800 Capital and reserves Called-up share capital (E1 shares) Profit and loss account 2 000 050 2 950 2 000 900 2 900