Financial Reporting for Businesses

FINANCIAL REPORTING FOR
BUSINESSES

TABLE OF CONTENTS
QUESTIONS...................................................................................................................................1
a) Calculation of profitability, liquidity, efficiency and gearing ratio for the year ended
December, 2018 of Unite Group plc............................................................................................1
b) Analysis of the performance and position of Unite Group plc on the basis of above
calculations..................................................................................................................................2
C) Analysis of change in lease accounting rules from IAS 17 Leases to IFRS 16 Leases.........5
REFERENCES................................................................................................................................7

QUESTIONS
a) Calculation of profitability, liquidity, efficiency and gearing ratio for the year ended
December, 2018 of Unite Group plc.
Ratio Calculations.
Particulars Formula 2018 2017 Change
Profitability Ratios
1
Return on capital
employed
Net operating
profit/Employed
Capital 6.05% 6.82% -11.21%
Employed Capital
Total assets –
Current liabilities
(2849-
147.4) 2701.6
(2431.6-
157.5) 2274.1 18.80%
Net operating profit 163.5 155 5.48%
2 Return on Equity
Net Income /
Shareholder's
Equity 11.31% 12.76% -11.38%
Net Income 237.3 223.8
Shareholder's Equity 2098.8 1754.2
3
Gross profit
margin
Total Sales –
COGS/Total Sales 68.67% 65.55% 4.76%
COS 40.2 41.1
Sales 128.3 119.3
4
Operating profit
margin
Operating Income/
Net Sales 191.58% 192.29% -0.37%
Operating income 245.8 229.4
Sales 128.3 119.3
Net assets 2849.5 2431.6
Liquidity Ratios
Current assets 220.8 138.6
Current liabilities 147.4 157.5
Inventory 9.1 4.5
Quick assets 211.7 134.1
6 Current ratio
Current assets /
current liabilities 1.50 0.88 70.22%
7 Quick ratio
Current assets -
(stock + prepaid
expenses) 1.44 0.85 68.68%
1