Page 24 - A Level Business Studies - Financial Analysis Tasks

Task 4.f

From the information provided calculated the Return on Equity Employed for Year 1 and Year 2.
Round to 1 decimal place. Show as a %.

Table 1 - Extracts from Greenwood PLC - Statements of

Financial Position

Year 1 (£) Year 2 (£) Return on Equity
Year 1
Non-Current Assets 985,500 1,020,000 (Capital) Employed

Current Assets 230,823 236,580 Return on Equity Year 2
(Capital) Employed
Current Liabilities (391,323) (469,606)

Non Current Liabilities (175,000) (56,892)

Net Assets 650,000 730,082

Total Equity 650,000 730,082

Table 2 - Extracts from Greenwood PLC - Income Statements

Year 1 (£) Year 2 (£)

Sales Revenue 2,546,789 3,324,567
Gross Profit 1,436,789 1,267,235

Operating Expenses 1,078,789 785,678

Operating Profit (Or Loss) 358,000 481,557

Give reasons for the change in ROEE between Year 1 and Year 2

24 | P a g e © B u i l d Y o u r S k i l l 2 0 2 0