Wonder Kid Enterprises Company has produced the following results over the last three years:

Management has just issued its annual report for 20XZ and a fair reading of their commentary is that the company has done very well because the trend in profit after interest and taxes have shown a high level of growth. In addition it is disclosed that the development of its latest technological breakthrough is taking longer to get regulatory approval than earlier thought. A review of the financial press ascertains that interest rates have remained steady over the three years.
Required:
Discuss the results showing calculations where appropriate?

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20XY 1,600,000 20XX 1,000,000 20XZ 3,000,000 Profit before interest and taxes Interest Taxes Profit after interest and taxes Financing using debt 160,000 252,000 320,000 384,000 896,000 40% 8,000,000 20% 900,000 630,000 1,470,000 40% 20,000,000 25% 588,000 40% 4,000,000 Funds employed (debt + equity) Shareholders' before tax required rate of return on investment 20%