1. Biannual data which was selected from RW’s accounts are given below which relate to its first 6 years of operations as a private firm from 2018 to 2023. In addition, the pro forma information is provided for comparison purposes. The pro forma accounts are principal accounts which show the firm’s business performance as a public firm for 2017 assuming it had utilised private sector accounting principles. They also include payment of dividends based upon the prospectus’s dividend policy. Privatised utility firms are monitored by a regulatory body which control price increase. The location’s water demand served by RW has increased at 2% per year which is largely reflecting the trends of demographics.

Key accounting data for the year ending 31 December (£m)

2017 (pro forma)	2019 (actual)	2021 (actual)	2023 (actual)
Sales	460	490	550	630
Operating profit	36	45	65	85
Taxes	6	7	9	11
Profit after tax	30	38	56	74
Dividend	8	11	16	21
Total assets	110	129	161	201
Capex	30	40	70	85
Salary	110	108	100	96
Directors’ emoluments	0.9	2.1	2.4	3.1
No. of workers	12,100	11,900	10,600	10,100
Mean P-E ratio	-	8.0	9.0	8.5
Index of Retail Prices	110	112	115	119

Required:

Based upon the data given, evaluate the extent RW had fulfill the interest of the parties as the following, in its first 6 years as a private firm. If possible, recommend other useful data as well to form a balanced evaluation:

1. Equity holders (5 marks)
2. Consumers (5 marks)
3. Workers (5 marks)
4. The macroeconomic achievements of NW with respect to the stability of prices and economic growth. (5 marks)

Answer rating: 100% (QA)

Equity holders Equity holders have seen an increase in profit after tax from 30 million in 2017 to 7... View the full answer