the term turnover in this financial data is a synonym for revenue 604354
The data below appear in the five – year summary of a major international company. A business combination with another major manufacturer took place in 2003. The term turnover in this financial data is a synonym for revenue.
|
2000 |
2001 |
2002 |
2003 |
2004 |
Financial statements |
GBP m |
GBP m |
GBP m |
GBP m |
GBP m |
Income statements |
|
|
|
|
|
Turnover (i.e., revenue) |
4,390 |
3,624 |
3,717 |
8,167 |
11,366 |
Profit before interest and taxation |
|
|
|
|
|
(EB1T) |
844 |
700 |
704 |
933 |
1,579 |
Net interest payable |
-80 |
-54 |
-98 |
-163 |
-188 |
Taxation |
186 |
195 |
208 |
349 |
-579 |
Minorities |
-94 |
-99 |
-105 |
-125 |
-167 |
Profit for the year |
484 |
352 |
293 |
296 |
645 |
|
2000 |
2001 |
2002 |
2003 |
2004 |
Balance sheets |
|
|
|
|
|
Fixed assets |
3,510 |
3,667 |
4,758 |
10,431 |
11,483 |
Current asset investments, cash at bank and in hand |
316 |
218 |
290 |
561 |
682 |
Other current. Assets |
558 |
514 |
643 |
1,258 |
1,634 |
Total Assets |
4,384 |
4,399 |
5,691 |
12,250 |
13,799 |
Interest bearing debt (long term) |
-602 |
-1,053 |
-1,535 |
-3,523 |
– 3,707 |
Other creditors and provisions (current) |
-1,223 |
-1054 |
-1,102 |
-2,377 |
-3,108 |
Tota1 liabilities |
-1,825 |
– 2,107 |
-2,637 |
-5,900 |
-6,815 |
Net assets |
2,559 |
2,292 |
3,054 |
6,350 |
6,984 |
Shareholders” funds |
2,161 |
2,006 |
2,309 |
5,572 |
6,165 |
Equity minority interests |
398 |
286 |
745 |
778 |
819 |
Capital employed |
2,559 |
2,292 |
3,054 |
6,350 |
6,984 |
Cash flow |
|
|
|
|
|
Working capital movements |
-53 |
5 |
71 |
85 |
107 |
Net cash inA0y, from operating activities |
864 |
859 |
975 |
1,568 |
2,292 |
Which of the following choices best describes reasonable conclusions an analyst might make about the company’s solvency?
a. Comparing 2004 with 2000, the company’s solvency improved, as indicated by an increase in its debt-to-assets ratio from 0.14 to 0.27.
b. Comparing 2004 with 2000, the company’s solvency deteriorated, as indicated by a decrease in interest coverage from 10.6 to 8.4.
c. Comparing 2004 with 2000, the company’s solvency improved, as indicated by the growth in its profits to GBP 645 million.