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Hi
https://www.scribd.com/document/261616049/F7-2014-Dec-Ans
Regards to Hydan question
The summary mentioned that Hydan’s adjusted result is slightly ahead than secor averages in most areas.
What is most areas? I only see adjusted net asset turnover which is higher than the sector average.
Adj :
1. ROE 21.7
2. NA turnover: 1.75
3. Gprofit margin: 28.57%
4. Nprofit margin: 9.30%As reported:
1. 47.1 %
2. 2.36
3. 35.7 %
4. 20.%Sector average
1. 22%
2. 1.67
3. 30%
4. 12%If only 1 out of 4 ratio is higher than sector average wouldnt it make the purchase not justified?
why isnt being mentioned that the fall in net margin is 9.30% from 12% average or even 20% as reported. Isnt it bad?Or are the values should be rounded up and ~accepted as being close enough *shrugs* to average so purchase acceptable. But i really cant brain the net profit, 22.5% decrease from sector and 53.5% decrease from reported, being ~close enough thing
Also in the answer part c:
They say “main concern is that any information about benefits Lodan passed on to Hydan through related party transactions is difficult to obtain from published sources”
By published sources, does it mean consol statements?
they also mentioned “considerable amount of post acquisition trading” can you point out where is that being reflected in the f/s? What post aqui trading?
How to best answer the part succinctly cutting right to the gist using simple understandable words? Please help me chris get through this.
This is what i understand:
“Because the ultimate parent, lodan and the sub, Hydan have a related party relationship, it is subject to the influence of related party transactions. It obtains benefits for being part of the group. Issue here is the benefits passed on via related party transaction difficult to extracted from published accounts. But indicators of benefits present are the remunerations not at market rates and the interest free loans. ”So the conclusion we should give is what exactly?
Should we give decision, entity f/s or consol is better?(Btw related party and inter party, can it be used interchangeably ?)
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