Prepare the Ordinary Share Capital Note - NSC Accounting - Question 2 - 2023 - Paper 1

To complete the cash flow of operating activities, we include:

• Cash generated from operations: Detailed calculation is as follows:

  • Interest received: $(-117600)
  • Dividends paid: $(-738000)
  • Income tax paid: $(-267000)

  The final figure will include these components summarized properly.

  Hence, cash flow from operating activities can be presented in the following formula:

  $Cash \ Flow = Interest + Dividends + Income\ Tax$

For cash flow of financing activities, we list:

• Proceeds from shares issued: $1 878 600
• Funds used to repurchase shares: $(-666 000)

These figures balance against each other to give a proper overview of cash inflow and outflow.

Net asset value per share is calculated as:

$Net\ Asset\ Value\ = \frac{10 200 000}{1 410 000} \times 100$

This provides a percentage that indicates per share value, giving insights into the company’s assets versus the shares outstanding.

The dividend payout rate can be calculated using the formula:

$Payout\ Rate = \frac{DP}{NP} \times 100$

Where DP is the Dividends Paid and NP is the Net Profit. This gives an idea of how much profit is returned to shareholders in the form of dividends.

To find the return on average shareholders' equity, we calculate:

$Return = \frac{Net\ Income}{Average\ Shareholders'\ Equity} \times 100$

This metric is crucial for understanding the profitability relative to the equity invested.