Alpha plc and Beta Ltd are competitors in the same industry, and sector. You are provided...

 

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Alpha plc and Beta Ltd are competitors in the same industry, and sector. You are provided with the most recent summarised financial accounts for the two companies as follows: - Balance Sheets: Alpha Beta £000's £000's £000's £000's Fixed Assets Freehold property at cost 105,000 188,000 Other assets at cost 63,000 84,000 Depreciation 21,000 66,000 Net book value 42,000 18.000 147,000 206,000 Current Assets Stocks 70,875 79,800 Debtors 44.075 42,420 114,950 122,220 Current Liabilities Creditors 32,530 81,720 Overdraft 1,420 42,000 Taxation 20,000 3,500 53.950 127.220 Net Current Assets/(Liabilities) 61,000 (5,000) 208,000 201,000 Non-Current Liabilities 8% Debentures 20X6 52,500 155,500 201,000 Financed by: Ordinary shares 84,000 128,000 Retained profits 71,500 73.000 155,500 201,000 10:50 .ill 20% AFM coursework - Read-only K 7 ку London South Bank University 2020/21 AFE Division Profit and loss accounts: - Alpha Beta £000's £000's £000's £000's Turnover Cost of sales 420,000 315,000 336,000 236.250 Gross profit 84,000 78,750 Less expenses: Administration 14,300 12,950 Selling and distribution 13,500 12,800 Directors' emoluments 11,000 14,000 Depreciation 9,000 7,500 Overdraft interest 500 3,000 Debenture interest 4,200 52,500 50,250 Profit before tax 31,500 28,500 Corporation tax 20,000 3,500 Profit after tax 11,500 25,000 Retained profits 60,000 48,000 Retained profits at year end 71,500 73,000 Requirement: - Using the above information you are required to write a report to the board of directors of a company considering making a substantial investment in one of the two companies. Your report should cover the following areas: - (a) calculate TEN ratios for both companies using comparable formulae; (max 40%) (b) comment briefly on what the ratios assess and the differences in the outcomes for both companies; (max 40%) (c) the suitability for potential investment in one of the companies. (max 20%) End of Assignment 5 ОТ 3 Alpha plc and Beta Ltd are competitors in the same industry, and sector. You are provided with the most recent summarised financial accounts for the two companies as follows: - Balance Sheets: Alpha Beta £000's £000's £000's £000's Fixed Assets Freehold property at cost 105,000 188,000 Other assets at cost 63,000 84,000 Depreciation 21,000 66,000 Net book value 42,000 18.000 147,000 206,000 Current Assets Stocks 70,875 79,800 Debtors 44.075 42,420 114,950 122,220 Current Liabilities Creditors 32,530 81,720 Overdraft 1,420 42,000 Taxation 20,000 3,500 53.950 127.220 Net Current Assets/(Liabilities) 61,000 (5,000) 208,000 201,000 Non-Current Liabilities 8% Debentures 20X6 52,500 155,500 201,000 Financed by: Ordinary shares 84,000 128,000 Retained profits 71,500 73.000 155,500 201,000 10:50 .ill 20% AFM coursework - Read-only K 7 ку London South Bank University 2020/21 AFE Division Profit and loss accounts: - Alpha Beta £000's £000's £000's £000's Turnover Cost of sales 420,000 315,000 336,000 236.250 Gross profit 84,000 78,750 Less expenses: Administration 14,300 12,950 Selling and distribution 13,500 12,800 Directors' emoluments 11,000 14,000 Depreciation 9,000 7,500 Overdraft interest 500 3,000 Debenture interest 4,200 52,500 50,250 Profit before tax 31,500 28,500 Corporation tax 20,000 3,500 Profit after tax 11,500 25,000 Retained profits 60,000 48,000 Retained profits at year end 71,500 73,000 Requirement: - Using the above information you are required to write a report to the board of directors of a company considering making a substantial investment in one of the two companies. Your report should cover the following areas: - (a) calculate TEN ratios for both companies using comparable formulae; (max 40%) (b) comment briefly on what the ratios assess and the differences in the outcomes for both companies; (max 40%) (c) the suitability for potential investment in one of the companies. (max 20%) End of Assignment 5 ОТ 3