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FAO People doing the ratio q in accounting

  • 18-06-2006 1:00pm
    #1
    willowmegs
    Closed Accounts Posts: 218 ✭✭


    Heya, was just going through the past papers and it seems part b for the last 3 years has been about shares? Do you think this year they will ask about a loan? And while i'm at it does anyone have the formulae to get the new gearing % and the new return on capital? Thank yoou!!!


Comments

  • #2
    DonaldDuck
    Closed Accounts Posts: 173 ✭✭DonaldDuck


    In my mocks they asked the loan :(


  • #3
    MB44
    Registered Users, Registered Users 2 Posts: 301 ✭✭MB44


    i say they will ask about debenture holders or a loan. thos ratios should be in your book


  • #4
    Rob30888
    Registered Users Posts: 303 ✭✭Rob30888


    willowmegs wrote:
    Heya, was just going through the past papers and it seems part b for the last 3 years has been about shares? Do you think this year they will ask about a loan? And while i'm at it does anyone have the formulae to get the new gearing % and the new return on capital? Thank yoou!!!

    Gearing is Debt:Capital Employed (that's how I do it) and Return on Cap is Net Profit + Interest x100 over Capital Employed


  • #5
    happydance
    Closed Accounts Posts: 103 ✭✭happydance


    willowmegs wrote:
    Heya, was just going through the past papers and it seems part b for the last 3 years has been about shares? Do you think this year they will ask about a loan? And while i'm at it does anyone have the formulae to get the new gearing % and the new return on capital? Thank yoou!!!

    It's fairly the same as before. to get the new gearing after a loan your loans will increase by the amount of the loan and so will the capital employed under the line. Likewise for the ROCE the capital employed will increase by the value of the loan.

    Also it's worth while redoing the interest cover to accomodate for the loan, but make sure to put in a line about "assuming current preformance continues" or something.


  • #6
    willowmegs
    Closed Accounts Posts: 218 ✭✭willowmegs


    K, thanks all!


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  • #7
    UnitedIrishman
    Registered Users, Registered Users 2 Posts: 5,369 ✭✭✭UnitedIrishman


    happydance wrote:
    It's fairly the same as before. to get the new gearing after a loan your loans will increase by the amount of the loan and so will the capital employed under the line. Likewise for the ROCE the capital employed will increase by the value of the loan.

    Also it's worth while redoing the interest cover to accomodate for the loan, but make sure to put in a line about "assuming current preformance continues" or something.

    It's all pretty much the same isn't it with shareholders and loans, except you do workings for before the loan and after the loan. Interest cover and that craic.


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