Electric Game Plc is an energy company, providing energy throughout the West Midlands. During the year ended
Question:
Electric Game Plc’ is an energy company, providing energy throughout the West Midlands. During the year ended 31 March 2021, Electric Game acquired all the operations of ‘Squid energy’ together with all their customers as the company went into Administration. Below are the income statements, extracts from the statements of financial position and extracts from the notes to the financial statements for ‘Electric Game plc’. for the financial years ended 31 March 2022 and 31 March 2021.
2022 | 2021 | ||
£m | £m | ||
Revenue | 3,462 | 2,394 | |
Cost of sales | 2,570 | 1,591 | |
Gross profit | 892 | 803 | |
Administration expenses | 201 | 264 | |
Operating profit | 691 | 539 | |
Finance income | 1 | 1 | |
Finance expense | 100 | 84 | |
Profit before tax | 590 | 454 | |
Income tax | 42 | 32 | |
Profit for the year | 548 | 422 | |
Non-current assets | 2,400 | 1,640 |
2022 | 2021 | ||
Number | Number | ||
Employees: average during the year | 406 | 254 | |
Number of subscribers (millions) | 862 | 556 |
- Calculate the following ratios for 2022 and 2021 for ‘Electric Game plc’
- Gross profit percentage
- Operating profit percentage
- Profit before tax percentage
- Profit after tax percentage
- Non-current asset turnover
- Revenue per employee
- Operating profit per employee
- Any other ratios you consider to be relevant to an assessment of the profitability of ‘Electric Game plc’
2. Evaluate the changes in profitability for ‘Electric Game plc’ between 2021 and 2022, analysing reasons for the changes in profitability in 2022.
Financial Accounting for Decision Makers
ISBN: 978-0273763451
6th Edition
Authors: Peter Atrill, Eddie McLaney