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UNIT 5 Company accounts


Before you read

Discuss these questions.

1. What does the profit and loss account of a company show?

2. If you were the company's bankers, what would you look for when reading this account?

3. What does a company's balance sheet show?

4. What would the company's bankers look for in the balance sheet?


Reading tasks

Read the financial data produced by British Airways and published on the internet for investors.



AUDITED for the year to March 31, 1998

£ million
Most of our revenue was earned from our main business, airline operations: 7,881 7,608
Income from other activities earned:
This gave us total Group turnover of: 8,642 8,359
Our expenses comprised:    
Pay and other employee costs: 2,211 2,248
Depreciation of fixed assets:
Selling costs: 1,217 1,187
Other operational costs: 4,159 3,872
In total, therefore, our overall Group operating costs were: 8,138 7,813
Deducting this from our Group turnover left a Group operating profit of:
Other income and charges amounted to:
The net profit on sale of fixed assets during the year was:
Net interest payable amounted to: (168) (182)
This produced a Group profit before tax of:
Then we provided for tax totalling: (133) (90)
This produced a Group profit after tax of:
Profit or loss from subsidiaries in which we have a minority interest:
This left a Group profit attributable to shareholders of:
From this we allowed for dividends representing a total of: (176) (154)
Finally, this left a profit retained in the business of:
Earnings per share: The standard measure of a company's profitability is calculated by dividing profit attributable to shareholders by the average number of shares. On this basis, our earnings per share were:   44.7p   55.7p



Date: 2014-12-21; view: 3940

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