Exam 8: Understanding Financial Reports: Trend Analysis

Extracts from Ron Bayliss's statements of profit or loss over a four-year period are as follows: Which one of the following statements is correct? Analysed horizontally, these figures show:

Extracts from Robina's financial statements show the following: Using common size analysis, with total assets as the base figure, which of the following are correct? A. Long-term borrowings have decreased over the period covered by the financial statements relative to total assets. B. Non-current assets have decreased over the period covered by the financial statements relative to total assets.

In its 20X3 financial year Tee Limited made a gross profit margin of 23.5% on revenue of £1 800 200.Its closest rival, Dee Limited, made a gross profit margin of 24.7% in the same period.By what percentage (to one decimal place) would the revenue of Tee Limited need to increase in order to make the same gross profit margin as Dee Limited, assuming that the cost of sales figure remains exactly the same?

Bloodworth is engaged in the sale of spare parts for tractors and farm machinery.It has a close rival, Ketley Limited.Extracts from the statements of profit or loss of the two companies for the year ended 31 December 20X1 are as follows: Ketley's gross profit margin is higher than Bloodworth's.However, Ketley charges depreciation of £18 000 on its storage facilities to operating expenses whereas Bloodworth includes the equivalent charge in its cost of sales.After making the appropriate adjustment for this difference, which of the following statements are correct? A. Operating profit margin remains unchanged. B. Bloodworth's gross profit margin now exceeds that of Ketley.

Naria's business has the following trading results in 20X4 and 20X5: Which one of the following statements is correct? Between 20X4 and 20X5:

Which one of the following statements describes horizontal analysis? Horizontal analysis is:

Zee and Co's operating profit increased by 3% between 20X6 and 20X7.Which one of the following is NOT a plausible explanation for the increase?

The revenue figure for Yates Clothing Co Limited was £772 600 for the 20X6 financial year.Between 20X6 and 20X7 revenue increased by 5%, and by 7.2% between 20X7 and 20X8.Gross profit in 20X8 was 24.3% of revenue. What was the gross profit figure for the company in 20X8 (to the nearest £)?

The revenue figure for Beechwood & Co for 20X4 was £286 630.This was 5.3% higher than the figure for 20X3 which itself was 2.8% higher than the 20X2 figure.In 20X2 the operating profit percentage was 16.5%. What was the operating profit of the business in 20X2 (to the nearest £)?

Which one of the following statements describes common size analysis: Common size analysis: