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Ratio Analysis for Foggy Ltd and Compo Ltd

Given the attached tables and information on the Foggy Ltd and Compo Ltd companies, complete the following ...

(a) Prepare an extract of the Profit and Loss Account for the year ended 31 March 2003 commencing with the operations profits for:
i) Foggy Ltd.
ii) Compo Ltd.

(b) Calculate the following for each company:
i) Interest cover
ii) Earnings per share (EPS)
iii) Dividend per share
iv) Price earnings ratio (PER)
v) Dividend yield

(c) Compare and comment briefly on the ratio for Foggy ltd. adn Compo Ltd. in (b)

(c) Explain two ways in which ratios may be used to assess the performance of companies.

(e) State three items which should be contained in the directors' report which accompanies final accounts of a company.


Solution Preview

The calculations are in the attached file.

c. The ratios show that Compo P/E is much higher than Foggy, market is expecting Compo to do
much better than Foggy in the coming years. This is a bit surprising since ...

Solution Summary

The solution prepares the profit and loss account and then calculates some ratios to compare the performance of Foggy Ltd and Compo Ltd