A company’s capital structure at December 2002 is as follows: $m Ordinary share capital 380 Accumulated profits 120 —— 500 8% Loan notes 100 —— 600 —— The company’s income statement shows the following for the year ended 31 December 2002: $m Operating profit 40 Interest paid 8 —— 32 Taxation 10 —— 22 Dividends paid 10 —— Retained profit for year 12 —— What is the return on equity shareholders’ capital employed, using closing capital figures? A 4·4% B 2·4% C 3·7% D 5·8%
A company’s capital structure at December 2002 is as follows: $m Ordinary share capital 380 Accumulated profits 120 —— 500 8% Loan notes 100 —— 600 —— The company’s income statement shows the following for the year ended 31 December 2002: $m Operating profit 40 Interest paid 8 —— 32 Taxation 10 —— 22 Dividends paid 10 —— Retained profit for year 12 —— What is the return on equity shareholders’ capital employed, using closing capital figures? A 4·4% B 2·4% C 3·7% D 5·8%
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter2: Financial Statements And The Annual Report
Section: Chapter Questions
Problem 2.8E: Income Statement Ratio The income statement of Holly Enterprises shows operating revenues of...
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A company’s capital structure at December 2002 is as follows:
$m
Ordinary share capital 380
——
500
8% Loan notes 100
——
600
——
The company’s income statement shows the following for the year ended 31 December 2002:
$m
Operating profit 40
Interest paid 8
——
32
——
22
Dividends paid 10
——
Retained profit for year 12
——
What is the return on equity shareholders’ capital employed, using closing capital figures?
A 4·4%
B 2·4%
C 3·7%
D 5·8%
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