12:59 18 < Tutorial session 10 TODO +6 56% +0 Financial Analysis Question Delicious plc You have been retained as a consultant by Theresa Cameron, a local entrepreneur. He recently learn that his competitor Rex Roomy is looking to sell his 70% controlling interest in Delicious ple which operates a chain of ice-cream shops within the region. Theresa has obtained the following summarised financial statements relating to Delicious ple Income Statements for the year ended 31 December 2011 2012 2013 2014 2015 Sales 7944 8004 8032 8040 8100 Cost of sales 4768 4884 5624 5224 6036 Gross Profit 3176 3120 2408 2816 2064 Expenses 2532 2592 1948 2424 1748 Operating profit (PBIT) 644 528 460 392 316 Interest 40 44 48 52 60 Profit before tax 604 484 412 340 256 Tax 128 104 92 76 52 Profit after tax 476 380 320 264 204 Dividends Preference Ordinary Retained profit for year 32 32 32 36 36 100 104 108 128 140 344 244 180 100 28 Balance Sheets as at 31" December 2011 2012 2013 2014 2015 Non-current assets Land 1250 1250 1250 1250 1250 Property, plant & equipment 750 1070 1390 1870 2262 Total Non-current (Fix) Assets 2000 2320 2640 3120 3512 Current assets Inventory 96 104 108 180 272 Receivables 448 480 484 520 536 Cash at bank 100 96 120 84 36 Total Current Assets 644 680 712 784 844 Total assets 2644 3000 3352 3904 4356 Capital Ordinary shares 1 1000 1000 1000 1200 1200 Preference shares 1 352 352 352 400 400 Share premium 48 48 48 100 100 Retained profits 512 800 1028 1180 1216 Total capital 1912 2200 2428 2880 2916 Non-current liabilities Long term loan 10% 400 440 3 480 520 600 Total Non-current liabilities 400 440 480 520 600 Current liabilities Accounts payable Tax 104 152 244 300 648 77 62 55 45 31 12:59 18 < Non-current liabilities TOD Long term loan 10% 400 Total Non-current liabilities 400 440 Current liabilities Accounts payable 104 77 Other current liabilities 151 ** 440 480 520 600 480 520 600 152 244 300 648 62 55 45 31 146 145 159 161 Total Current liabilities 332 360 444 504 840 Total Capital and Liabilities 2644 3000 3352 3904 4356 Share price at 31" Dec. 64.40 14.32 4.28 14.20 3.80 You are required to: Provide an analysis of the financial performance of Delicious ple Your response should be in the form of a short report addressed to Theresa Cameron and should include appropriate financial accounting ratios and a recommendation as to whether you believe investment in the company would be worthwhile. KO < 112 56% +0 You have been retained as a consultant by Theresa Cameron, a local entrepreneur. He recently learn that his competitor Rex Roomy is looking to sell his 70% controlling interest in Delicious plc which operates a chain of ice-cream shops within the region. Theresa has obtained the following summarised financial statements relating to Delicious plc. Income Statements for the year ended 31 December 2011 2012 2013 2014 2015 Sales 7944 8004 8032 8040 8100 Cost of sales 4768 4884 5624 5224 6036 Gross Profit 3176 3120 2408 2816 2064 Expenses 2532 2592 1948 2424 1748 Operating profit (PBIT) 644 528 460 392 316 Interest 40 44 48 52 60 Profit before tax 604 484 412 340 256 Tax 128 104 92 76 52 Profit after tax 476 380 320 264 204 Dividends Preference 32 32 32 36 36 Ordinary 100 104 108 128 140 Retained profit for year 344 244 180 100 28 Balance Sheets as at 31 December 2011 2012 2013 2014 2015 Non-current assets Land 1250 1250 1250 1250 1250 Property, plant & equipment 750 1070 1390 1870 2262 Total Non-current (Fix) Assets 2000 2320 2640 3120 3512 Current assets Inventory 96 104 108 180 272 Receivables 448 480 484 520 536 Cash at bank 100 96 120 84 36 Total Current Assets 644 680 712 784 8441 Total assets 2644 3000 3352 3904 4356 Capital Ordinary shares 1 1000 1000 1000 1200 1200 Preference shares 1 352 352 352 400 400 Share premium 48 48 48 100 Retained profits 100 512 800 1028 1180 1216 Total capital 1912 2200 Non-current liabilities 2428 2880 2916 Long term loan 10% 400 440 480 520 600 Total Non-current liabilities 400 440 480 520 600 Current liabilities Accounts payable 104 152 244 300 648 Tax 77 62 55 45 31 Other current liabilities 151 146 145 159 161 Total Current liabilities 332 360 444 504 840 Total Capital and Liabilities 2644 3000 3352 3904 4356 Share price at 31 Dec. 4.40 4.32 4.28 4.20 3.80 You are required to: Provide an analysis of the financial performance of Delicious plc Your response should be in the form of a short report addressed to Theresa Cameron and should include appropriate financial accounting ratios and a recommendation as to whether you believe investment in the company would be worthwhile