This document consists of 6 printed pages and 2 blank pages.
© CIE 2003
CAMBRIDGE INTERNATIONAL EXAMINATIONS
General Certificate of Education
Paper 4 Problem Solving (Supplementary Topics)
READ THESE INSTRUCTIONS FIRST
If you have been given an Answer Booklet, follow the instructions on the front cover of the Booklet.
Write your Centre number, candidate number and name on all the work you hand in.
Write in dark blue or black pen on both sides of the paper.
You may use a soft pencil for any rough working.
Do not use staples, paper clips, highlighters, glue or correction fluid.
Answer all questions.
At the end of the examination, fasten all your work securely together.
The questions in this paper carry equal marks.
All accounting statements are to be presented in good style. Workings should be shown.
You may use a calculator.
The number of marks is given in brackets [ ] at the end of each question or part question.
Information about Foggy Ltd and Compo Ltd at 31 March 2003 is as follows:
Additional information for the year ended 31 March 2003:
(a) Prepare an extract of the Profit and Loss Account for the year ended 31 March 2003
commencing with the operating profit for
(i) Foggy Ltd
(ii) Compo Ltd
At 31 March 2003 the market prices of the ordinary shares were as follows:
Foggy Ltd $1.60 Compo Ltd $1.35
(b) Calculate the following for each company:
(ii) Earnings per share (EPS)
(iii) Dividend paid per share
(iv) Price earnings ratio (PER)
(v) Dividend yield
(c) Compare and comment briefly on the ratios for Foggy Ltd and Compo Ltd in (b).
(d) 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 the
final accounts of a company.
Share capital: ordinary shares of $1.00