The summarised version of the Year 7 accounts of Worldchem plc is shown below along with comparative
Question:
The summarised version of the Year 7 accounts of Worldchem plc is shown below along with comparative figures for the previous year. Most of the notes in the accounts, which give further details about nearly every item, are omitted here.
Required:
(a) Calculate the financial ratios given below for the 2 years ended 31 December Year 6 and 31 December Year 7, respectively. (Use 142p and 136p as the market price per ordinary share for Year 6 and Year 7, respectively.)
(b) Compare the detailed results for Year 7 with those for Year 6 and with the industry average (Worldchem is in the same industry group as Craigielaw).
Present your answers for
(a) in the same manner as the presentation of Section 13.7 in Chapter 13. Comment on any aspects or changes you think significant, including interpretation of the statement of cash flows.
Note 2
Extract from Directors’ Report
The directors of Worldchem proposed a final dividend of 4.2 pence per share with respect to Year 7 that, added to the interim dividend of 1.7 pence, gives a total of 5.9 pence for the year. The corresponding figures for Year 6 proposed a final dividend of 4.1 pence plus interim dividend of 1.0 pence, giving a total of 5.1 pence per share.
The dividend paid during Year 7 was the proposed final dividend of 4.1 pence for Year 6 plus the interim of 1.7 pence for Year 7. Corresponding figures for dividend paid during Year 6 represent the proposed final dividend of 3.6 pence for Year 2 plus interim dividend of 1.0 pence for Year 6.
Note 3
The share price on the date of publication of the results for Year 7 was 142 pence (Year 6, 136p).
Step by Step Answer:
a b Notes and comments on WorldChem ratio analysis 1 It may be seen by comparing Year 7 with Year 6 that the ratios that measure profitability and use of assets for WorldChem have declined whereas the ...View the full answer
