# Tamalanplc is a retail chain with 160 stores and 14,000 employees.

Question # 00004138 Posted By: neil2103 Updated on: 11/25/2013 11:30 PM Due on: 11/29/2013
Subject Finance Topic Finance Tutorials:
Question

7.2 Tamalanplc is a retail chain with 160 stores and 14,000 employees. Its financial statements for 2008 are shown below:

 Income Statement 2008 2007 £m £m Turnover 1,021.5 847.4 Cost of sales -855.3 -710.4 Gross profit 166.2 137.0 Administrative expenses -47.9 -29.1 Operating profit 118.3 107.9 Net interest payable -0.9 -0.3 Profit on ordinary activities before taxation 117.4 107.6 Taxation -30.7 -33.5 Profit on ordinary activities after taxation 86.7 74.1 Dividends -33.3 -29.3 Profit retained for the period 53.4 44.8

 Additional information: Earnings per share 21.3p 18.4p There are 440 million shares issued of 10p each Market value of shares £1.50 £1.40

 Balance Sheet 2008 2007 £m £m Fixed assets Intangible assets - goodwill 37.3 32.3 Tangible assets 167.6 132.3 Investments 22.5 25.7 227.4 190.3 Current assets Inventory 135.0 105.3 Trade Receivables 22.5 20.8 Cash at bank 16.2 17.8 173.7 143.9 Total assets 401.1 334.2 Non-current liabilities Long term loans 14.8 13.4 Provision for deferred taxation 9.5 7.6 24.3 21.0 Current liabilities Trade payables 159.8 149.6 Total liabilities 184.1 170.6 Net assets 217.0 163.6 Equity Share capital 44.0 44.0 Profit and loss account 173.0 119.6 Shareholders' funds 217.0 163.6

Calculate sufficient ratios for both 2008 and 2007 to demonstrate the changes in profitability, liquidity, efficiency, gearing and shareholder return of Tamalanplc and comment on the most important changes between 2008 and 2007.

7.2

This problem requires you to calculate specific ratios for two years. You will need to research the type of ratios that make up the classifications in the question (profitability, liquidity, efficiency, gearing and shareholder return). Your answer should be structured by showing the name of the ratio in one column (ROCE for example) then a column for 2008 and a column for 2007 and both of these columns will contain the percentages or ratios. REMEMBER – you must show the calculation and you should show 16 ratios. NOTE: do not forget to "comment on the most important changes between 2008 and 2007" Problem 7.2 Tamalan plc - you will determine 16 ratios (if you don't have 16 then you left something out) that demonstrates changes in profitability, liquidity, efficiency, gearing and shareholder return. Research the text because these ratios are defined. For example:

Gross profit/Sales xx.x/xx.x = xx.x% xx.x/xx.x = xx.x% Note - for each year use a column format for both years.

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1. ## Solution: Tamalan Plc solution

Tutorial # 00003914 Posted By: neil2103 Posted on: 11/25/2013 11:32 PM
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