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EPS
185 - A number of ordinary shares before dilution number of potential shares number of ordinary shares after dilution profit after tax interest recognized for dilutive potential ordinary shares adjusted net profit/loss diluted EPS 186 number of shares share capital share premium share premium for issuing new shares 188 - A TERP Right issue fraction Weighted number of pre-issued ordinary shares Weighted number of post-issued ordinary shares => Weighted number of ordinary shared 31/12/20X EPS 189 - B Weighted average number of shares outstanding during the year Average FV of $1 ordinary share during the year Weighted number of shares under option issued Exercise price for shares under option Number of free shares Weighted average number of ordinary shares 190 total number of ordinary shares @ 31/03/20X bonus issue shares => total number of ordinary shares @ 31/03/20X profit for the year @ 31/03/20X dividend paid net profit/loss attributable to ordinary shareholders EPS 20X EPS 20X 191 - B weighted average no. of ordinary shares before dilution no. of potential shares weighted average no. of ordinary shares after dilution current net profit/loss attributable to ordinary shareholders adjustments from interest recognized
adjusted net profit/loss attributable to ordinary shareholders diluted EPS
Sphinx Co - Past exam Mar/Jun 2023 Working 1: PPE Items Land Buildings Balance at 01/01/20X Cost 50,000 150, Accumulated depreciation 90, Carrying amount 50,000 60, Revaluation amount 80,000 170, Gain on revaluation 30,000 110, Depreciation in year 20X5 8, Balance at 31/12/20X5 80,000 161, Deferred tax arised from revaluation = (30,000 + 110,000) * 20% Additional depreciation from revaluation = 110,000/ Journal entry adjustment Dr PPE/ Cr OCI Dr OCI/ Cr Deferred tax liability Dr Profit (Loss)/ Cr PPE Dr Revaluation reserve/ Cr Retained earnings Working 2: Foreign transaction Payable as at 31/10/20X5 (=40m/4) Payable as at 31/12/20X5 (=40m/5) Foreign exchange gain Journal entry adjustment Dr Payable/ Cr Profit (Loss) Working 3: Accrued interest expense Interest expense from 01/07/20X5 to 31/12/20X Journal entry adjustment Dr Profit (Loss)/ Cr Accrued expense (payable) Working 4: Current tax expense Under provision of the year 20X Provision for income tax of the year 20X Current tax expense Working 5: Right issue Number of shares as at 31/12/20X5 ('000) Number of share at right issue as at 11/09/20X Items Share equity B/f balance 100, Right issues 20,
Total equity and liabilities
Plant & Equipment
Share premium
Vroom Co - Past exam Mar/Jun 2023 Draft @01/01/20X3: total consideration transferred include 2 parts: (1) cash paid immediately (2) contingent liabilities fair value Total consideration transferred Capital employed = equity + long-term liabilities (1) Equity increase: NCI (20% share100m6.5) (2) Long-term liabilities: contingent liabilities Unrecognized ITA
- Sleek's FSs: not recognize
- Conso FSs: recognize FV of ITA
- Depreciation exprense increase (=250/10) -> decrease profit conso In year 20X3: expense off all R&D expenditure Goodwill = Consi transferred + NCI - FV of identifiable net assets of subsidiary FV of net assets = BV of net assets + FV adjustments BV of net asset = BV of equity (share equity) + retained earnings (loss) a) Calculate the goodwill arising on the acquisitin of Sleek Co Consideration transferred
Cash paid immediately 650
Fair value of contingent liabilities 210
NCI (100m * 20% * 6.8) Fair value of identifiable net assets
Share capital 100
Retained loss (80)
Fair value adjustment (intangible asset) 250
Goodwill at acquisition date b) Calculate ratios: GPM, OPM, ROCE Ratios Working 20X3 - Vroom Gr Gross profit margin 2,300/13,450 17.10% Operating profit margin 730/13,450 5.43% ROCE 730/33,670 2.17% c) Analyze the performance for the Vroom Gr_20X3 compared to the performance of Vro All ratios decreased in 20X3 in comparison with 20X
- Profit of Sleek loss, retained loss ($80m)
- Vroom must consolidate performance of Sleek in 20X3, while 20X2 did not
- Unrecognized ITA must be recognized in conso FSs -> increase dep expense ($25m)
$m 650 210 860 136 250 25 ts of subsidiary ek Co $m 860 136 270 726 Working 20X2 - Vroom Co 2,400/12,200 19.67% 940/12,200 7.70% 940/31,450 2.99% pared to the performance of Vroom Co_20X 20X2 did not e dep expense ($25m)
3: $136m), contingent lia in long-term lia (31/12/20X3: $160m), increase capital employed, decrease ROCE in
Consideration transferred
Reporting financial performance net exchange loss
- 10,000, - 1,600, - 11,600, - 1,850, - 84, - 1,934,
- 31/09/20X1 30/09/20X
- 200,000 250,
- 40,
- 11, - 1. - 1. - 2,142, - 3,500, - 5,642, - 1.
- g the year 5,000, - 3. - 500, - 2. - 100, - 5,100, - 4,000, - 1,000, - 5,000, - 3,600, - 3,600, - 0. - 0. - 100, - 30, - 130, - 313, - 7,
- 320,
- 177, - 28, - 5,
- 20X - $' - 166, - 2, (39,820) - 95, (32,500) - the year ended 31/12/20X - $'000 $'000 $' Revaluation surplus Retained earnings Total equity - 0 158,150 258, - 95,080 95, - 25, - 112,000 112, - (5,500) 5,500 - 106,500 258,730 490,
- he year ended 31/12/20X - $' - 418, - 418, - 115, - 130, - 245, - 663, - 120, - 5, - 258, - 106, - 490, - 30, - 28, - 58, - 16, - 68, - 1, - 30,
- 115,
- 663,
- mployed, decrease ROCE in 20X
- Cash consideration
- Contingent consideration
- NCI
- Share capital FV of net assets
- Retained earnings at acquisition (=-300+120*3/12) (270)
- Goodwill at the acquisition date
- P's RE 4,
- S's opening RE
- S's closing RE 3,
- URP (= 240 * 3/4 * (0.2/1.2))
- Adjusted S's RE 2,
- Conso RE 6,
- P's RE $m
- S's RE post-acquisition increase (NA increase) $m
- Impairment of goodwill (=25 * 20%)
- Adjusted S's RE 3.
- Conso RE 119.
- Cost of investment
- P's of associate post-acquisition profit
- Investment in associate Dividend paid (9)
- Property at cost 176 - C $m
- Accumulated depreciation
- Carrying amount
- Fair value
- Cost of disposal
- FV less cost of disposal
- NCA held for sale
- 177 @01/10/X6 Revenue: €250,000 274,
- @01/11/X6 Received: €125,000 131,
- Original €125,000 @01/10/X6 137,
- @31/12/X6 Receivable: €125,000 147,
- Original €125,000 @01/10/X6 137,
- 179 @01/11/X8 purchase €50,000 30,
- @01/12/X8 pay €25,000 15,
- original €25,000 @01/11/X8 15,
- @31/12/X8 pay €25,000 15,
- original €25,000 @01/11/X8 15,
- carrying amount @30/11/X6 1. 180 - B $m
- FV less cost of disposal 2.
- NCA held for sale 1.
- carrying amount 612, 184 - A loss on classification (45,000)
- proceeds 700,
- gain on disposal 88,
- gain 9, loss of bakery (34,000)
Section A Interpretation of accounting ratios and trends 204 - D interim equity div final equity div total div on the share ex div share price dividend yield 205 current market price profit attributable to ordinary shareholders weighted average no. of ordinary shares outstanding EPS P/E Section B 222 - B Current assets Current liabilities Current ratio 224 Current assets Inventory Current liabilities Quick ratio Section C 227 - Woodbank Co a) Ratios for Woodbank Co for the year ended 31 March 20X PBIT Shareholder's equity Non-current liabilities Capital employed (=95,000+55,000) Gross profit Revenue Current assets Current liabilities Return on capital employed (=PBIT/Capital employed) Gross profit margin (=Gross profit/Revenue) Operating profit margin (=PBIT/Revenue) Current ratio (=Current assets/Current liabilities) Gearing (=Non-current liabilities/Non-current liabilities+Shareholder's equity) b) Ratios for Woodbank Co for the year ended 31 March 20X4 (exclude the effec 20X3 20X4 20X4 - exclude Shaw Co Return on capital employed 11% 12% 13% Gross profit margin 22% 22% 20% Operating profit margin 9.1% 12% 10.8%
Current ratio 1.7 1.08 - Gearing 5.3% 36.7% - c) Analysis of performance and position Profitability Liquidity Gearing Conclusion 228 - Pinardi Group a) Gain on disposal of Silva Co Proceeds from disposal of Silva Co Net assets of Silva Co @01/01/X Net goodwill @01/01/X7 (W) Pinardi Group gain on disposal Working: Goodwill The acquisition of Shaw Co has materially affected the results of Woodbank Co for the 20X4. In order to make a meaningful comparison of the performance of Woodbank Co d March 20X4 with its performance during the year to 31 March 20X3, it is necessary to i acquisition and consider how Woodbank Co's performance would have looked without S Shaw Co has contributed positively to profitability with both the gross profit margin and and tax margin both being higher after the acquisition. However, the $50 million of loa the acquisition have increased capital employed and so exerted a downward pull on RO is 12%. Without Shaw Co it would have been 13%. This is likely to be due to only three Co being included in operating profit. If 12 months' profits were used, we could expect correspondingly higher. The current ratio of Woodbank Co has fallen from 1.7 to 1.08. This is a steep drop. We cash reserves have declined by $4.5 million, which is likely to be due to using cash res acquisition of Shaw Co. Trade payables have increased by $8 million. This suggests tha trouble paying its suppliers on time or that Shaw had a large amount of trade payables consolidated within the group. The retained earnings balance shows that Woodbank Co million during 20X4. This was perhaps unwise when working capital was needed to fina the additional loan interest. Had the dividend not bene paid the current ratio for 20X4 w from 20X3, but less alarming. Gearing has risen from 5.3% to 36.7%, attributable to an additional $50 million loan no acquisition of Shaw Co. The interest payments each year will be $5.5 million which is th the dividend paid 20X4. Shareholders may expect to receive less in future years as the take priority, but had the acquisition been funded by a share issue their returns would Gearing of 36.7% is still within acceptable limits and future good returns from the acqu retained earnings and keep gearing in check. Woodbank Co's performance would have been broadly comparable to the previous yea taken place. The acquisition of Shaw Co has had a detrimental effect on liquidity and g appears from three months' results to have the capacity to significantly increase profit seems likely that over a longer period this will also improve liquidity and gearing, givin result for shareholders.
