Tamalan PLC

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

Income Statement20082007

£m£m

Turnover1,021.5847.4

Cost of sales-855.3-710.4

Gross profit166.2137.0

Administrative expenses-47.9-29.1

Operating profit118.3107.9

Net interest payable-0.9-0.3

Profit on ordinary activities

   before taxation117.4107.6

Taxation-30.7-33.5

Profit on ordinary activities

   after taxation86.774.1

Dividends-33.3-29.3

Profit retained for the period53.444.8

Additional information:

Earnings per share21.3p18.4p

There are 440 million shares issued of 10p each

Market value of shares£1.50£1.40

Balance Sheet20082007

£m£m

Fixed assets

 Intangible assets - goodwill37.332.3

 Tangible assets167.6132.3

 Investments22.525.7

227.4190.3

Current assets

 Inventory135.0105.3

 Trade Receivables22.520.8

 Cash at bank16.217.8

173.7143.9

Total assets401.1334.2

Non-current liabilities

Long term loans14.813.4

Provision for deferred taxation9.57.6

24.321.0

Current liabilities

Trade payables159.8149.6

Total liabilities184.1170.6

Net assets217.0163.6

Equity

Share capital44.044.0

Profit and loss account173.0119.6

Shareholders' funds217.0163.6

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.