WORKSHOP FINANCE MBA

1. Workshop – ratio analysis
Summarised income statement of Lorry Plc for the year ended 31 December
2010 2011 2012
£m £m £m
Revenue 840 981 913
Cost of sales 554 645 590
Gross profit 286 336 323
Expenses 186 214 219
Operating Profit 100 122 104
Interest 6 15 19
Profit before taxation 94 107 85
Taxation 45 52 45
Profit after taxation 49 55 40
Dividends 24 24 24
Summarised balance sheet as at 31 December
2010 2011 2012
£m £m £m
Assets
Non-current assets
Intangible assets 36 40 48
Tangible assets 176 206 216
212 246 264
Current assets
Inventories 237 303 294
Receivables 105 141 160
Bank 52 58 52
606 748 770
Equity and liabilities
Equity
Ordinary share capital 100 100 100
Retained earnings 299 330 346
399 430 446
Non-current liabilities
Long-term loans 74 138 138
Current liabilities
Trade payables 53 75 75
Other payables 80 105 111
606 748 770

2. You are required:
1) To calculate relevant ratios for Lorry plc between 2010 and 2012 (use
year-end figures for balance sheet items)
Gross profit margin, ROCE, Operating profit margin; receivables
collection days, payables payment days, inventory turnover days;
current ratio, quick ratio; gearing ratio, interest cover
2) To analyse the performance of Lorry plc from 2010 to 2012.