Collingham plc produces electronic measuring instruments for medical research. It has recorded strong and consistent growth during the past 10 years since its present team of managers bought it out from a large multinational corporation. They are now contemplating obtaining a stock market listing. Collingham's accounting statements for the last financial year are summarised below. Fixed assets (i.e. noncurrent assets) including freehold land and premises, are shown at historic cost net of depreciation. The debenture is redeemable in two years although early redemption without penalty is permissible.

The following information is also available regarding key financial indicators for Collingham's industry.
Return on (long-term) capital employed ......................... 22% (pre-tax)
Return on equity ..................................................... 14% (post-tax)
Operating profit margin ............................................ 10%
Current ratio ......................................................... 1.8:1
Acid test ............................................................. 1.1:1
Gearing (total debt/equity) ........................................ 18%
Interest cover ........................................................ 5.2
Dividend cover ..................................................... 2.6
P:E ratio ............................................................. 13:1
Required
(a) Briefly explain why companies like Collingham seek stock market listings.
(b) Discuss the performance and financial health of Collingham in relation to that of the industry as a whole.
(c) In what ways would you advise Collingham:
(i) To restructure its balance sheet prior to flotation?
(ii) To change its financial policy following flotation?

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Profit and Loss Account (Income Statement) for the year ended 31 December 2014 (Em) Turnover Cost of sales Operating profit Interest charges Pre-tax profit Corporation tax (after capital allowances) Profits attributable to ordinary shareholders Dividends Retained earnings 80.0 10.0 7.0 1.0 6.0 (0.5) 5.5 Statement of Financial Position as at 31 December 2014 (Em) Assets employed Fixed: Land and premises 10.0 30.0 10.0 10.0 3.0 (15.0) Current: Stocks Cash Current liabilities: Trade creditors Bank overdraft Net current assets Total assets less current liabilities 23.0 3.0 33.0 (5.0) 28.0 Net assets Financed by: Issued share capital (par value 50p): Voting shares Non-voting 'A' shares Profit and Loss Account Shareholders' funds 2.0 2.0