ACCOUNTING FOR DECISION MAKERS - ASSIGNMENT ONE | 19

6.0 Appendix

Horizontal Analysis Data

2017 2016 2015 2014 2013 2012 2011 2010 2009 2008

Property, plant and equipment -18.1 7.2 -4.2 -2.3 4.6 -14.6 4.6 -5.7 -8.3 19.2
Intangible assets -13.9 -33.3 -18.2 8.8 -6.7 -2.0 16.0 6.6 -4.2 40.4

Investments in joint ventures and associates -68.1 13.1 -1.3 2.4 7180.0 -53.1 -54.9 136.7 30.4 15.0

Deferred income tax assets -78.9 63.4 -6.4 18.0 9.2 -20.2 4.0 -28.7 4.0 13.4

Financial assets – derivative financial instruments -18.1 119.2 -13.3 -18.9 -36.2 -1.7 32.1 19.6 -38.1 687.0

Other financial assets 18.5 -54.5 164.8 -42.6 203.2 19.2 -55.2 -6.5 -1.6 21.2

Trade and other receivables -1.0 -9.6 40.2 17.1 -11.4 -47.7 17.1 15.2 -26.3 17.8

Total Non-Current Assets -23.0 -20.6 -11.1 8.0 10.9 -4.7 14.2 4.5 -6.0 38.3

Intangible assets – pre-publication -27.6 21.8 2.6 14.4 7.7 2.5 0.5 -0.5 -6.5 54.4

Inventories -37.0 11.4 -5.8 0.0 -14.2 -35.9 -5.1 -3.6 -11.2 36.1

Trade and other receivables -18.2 5.7 -2.0 11.7 6.3 -20.3 3.7 4.1 -4.3 41.9

Financial assets – marketable securities -20.0 -64.3 75.0 166.7 0.0 -33.3 -25.0 -81.0 16.7 35.0

Cash and cash equivalents (excluding overdrafts) -64.5 -14.3 221.3 -27.3 -31.4 -22.4 -21.1 131.5 9.5 22.3

Total current Assets -38.2 -0.3 40.2 2.2 -7.8 -18.8 -8.3 30.5 -2.7 37.1

Total assets -21.6 -13.5 2.1 4.3 -3.7 0.9 5.4 13.3 -4.9 35.7

Financial liabilities – borrowings -56.0 18.4 8.8 11.2 -15.8 2.3 2.9 -1.3 -4.2 92.5
Deferred income tax liabilities -64.8 -16.8 -21.6 16.7 1.8 -3.1 31.6 -0.4 5.8 55.7
Retirement benefit obligations -25.2 0.0 -14.7 14.8 -17.4 3.6 12.2 -56.3 103.0 75.8

Conditional highlighting represents positive or negative increase from the previous year.
 ACCOUNTING FOR DECISION MAKERS - ASSIGNMENT ONE | 20

2017 2016 2015 2014 2013 2012 2011 2010 2009 2008

Provisions for other liabilities and charges -30.4 11.3 -13.4 6.5 -30.0 -4.3 173.8 -16.0 51.5 -25.0

Other liabilities -68.5 18.5 14.8 20.6 -8.9 -13.2 32.1 -2.8 14.5 16.3

Total Non-Current Liabilities -56.2 14.6 2.6 14.0 -10.9 -0.5 13.2 -7.5 5.1 72.6

Trade and other liabilities -17.6 17.2 -13.2 6.4 -3.3 -10.6 8.5 9.4 2.7 36.1

Financial liabilities – Borrowings -56.8 -84.4 -17.5 -35.8 103.4 201.1 -78.5 445.9 -78.5 -38.5

Current income tax liabilities 3.1 36.6 -13.7 15.9 -43.6 36.6 -0.9 35.2 16.9 41.7

Provisions for other liabilities and charges -7.4 -35.7 -20.8 -52.7 194.7 -20.8 166.7 0.0 -67.9 143.5

Total Current Liabilities -16.0 0.9 -12.8 -5.5 7.8 2.7 -6.8 30.0 -12.4 14.0
Total liabilities -32.4 9.6 -3.6 3.6 -7.3 6.7 4.3 6.0 -2.0 42.5
Net assets -7.5 -32.3 7.2 4.9 -0.1 -4.2 6.4 20.9 -7.7 29.7
Share capital -2.4 0.0 0.0 0.0 0.5 0.0 0.5 0.0 0.5 0.0
Share premium 0.2 0.3 0.4 0.4 0.5 0.4 0.8 0.5 0.3 0.2
Treasury shares -22.8 9.7 -4.0 -23.5 -4.9 -30.9 8.8 -39.4 1.8 2.8
Retained earnings -7.5 -80.6 5182.9 -32.0 -19.5 -64.8 -9.5 77.1 -61.3 14.0
Total equity attributable to equity holders of the company -7.6 -32.3 7.3 4.9 0.2 -4.3 7.3 27.5 -8.5 28.6
Non-controlling interest 100.0 0.0 -33.3 0.0 -75.0 26.3 -71.6 -77.0 6.2 53.1
Total equity -7.5 -32.3 7.2 4.9 -0.1 -4.2 6.4 20.9 -7.7 29.7
Sales -0.9 1.9 -8.3 -3.8 0.2 -13.7 3.5 10.2 6.8 15.6
Cost of goods sold -1.3 5.7 -10.0 -4.8 4.0 -15.2 1.4 8.6 9.6 13.8
Gross profit -0.5 -1.1 -6.9 -3.1 -2.8 -12.4 5.3 11.5 4.6 17.1
Operating expenses -12.1 19.6 -9.9 -1.2 6.2 -9.8 3.5 9.4 9.2 16.8

Conditional highlighting represents positive or negative increase from the previous year.
 ACCOUNTING FOR DECISION MAKERS - ASSIGNMENT ONE | 21

2017 2016 2015 2014 2013 2012 2011 2010 2009 2008

Share of results of joint ventures and associates -19.6 86.5 2.0 -5.6 500.0 -72.7 -19.5 36.7 20.0 8.7

Operating profit -118.1 518.1 -201.5 -13.1 -11.1 -58.0 65.0 20.0 -8.4 17.8

Finance costs 13.4 -3.0 -29.1 27.0 -1.8 16.5 -11.0 -10.7 -10.3 -9.3

Finance income 116.2 -47.9 47.9 37.1 9.4 23.1 -27.8 38.5 -42.2 2.3

Profit before tax -116.5 490.5 -242.0 -20.2 -12.0 -62.4 72.4 28.1 -10.6 25.0

Income tax -105.9 174.1 -228.6 -27.6 -41.2 -25.6 36.3 0.0 -15.1 31.3

Profit for the year from continuing operations -117.5 563.4 -245.5 -18.0 3.1 -70.1 82.4 39.0 -8.7 22.6

Profit for the year -117.5 -383.7 75.1 -12.8 63.8 -65.6 -26.5 181.4 43.0 4.2

Conditional highlighting represents positive or negative increase from the previous year.
 ACCOUNTING FOR DECISION MAKERS - ASSIGNMENT ONE | 22

Vertical Analysis Data: Balance Sheet

2017 2016 2015 2014 2013 2012 2011 2010 2009 2008

Property, Plant And Equipment 6.99 7.89 4.99 5.58 5.99 5.73 6.42 6.53 8.37 8.42

Intangible Assets 73.71 79.16 80.46 105.43 101.66 108.90 106.37 97.54 110.63 106.55

Trade And Other Receivables 2.56 2.39 1.79 1.37 1.23 1.38 2.53 2.30 2.42 3.03

Non-Current Assets 114.47 137.56 117.42 141.57 137.50 123.87 124.51 115.99 134.17 131.69

Inventories 3.68 5.40 3.29 3.74 3.93 4.57 6.83 7.65 9.60 9.97

Trade And Other Receivables 27.61 31.21 20.01 21.89 20.56 19.33 23.25 23.85 27.70 26.71

Cash And Cash Equivalents (Excluding Overdrafts) 12.88 33.56 26.53 8.86 12.78 18.60 22.96 30.97 16.18 13.63

Total Current Assets 62.80 93.95 63.87 48.86 50.16 54.34 64.09 74.34 68.85 65.29

Assets Classified As Held For Sale 18.90 0.00 0.00 0.00 3.91 20.53 0.00 0.00 0.00 0.00

Total Assets 196.17 231.51 181.29 190.43 191.57 198.74 188.59 190.33 203.02 196.97

Financial Liabilities – Borrowings -26.51 -55.75 -31.91 -31.46 -29.67 -35.20 -32.94 -34.04 -41.72 -40.19

Total Non-Current Liabilities -41.33 -87.26 -51.57 -53.88 -49.58 -55.60 -53.54 -50.33 -65.81 -57.76

Trade And Other Liabilities -33.37 -37.47 -21.66 -26.75 -26.38 -27.25 -29.20 -28.64 -31.64 -28.44

Financial Liabilities – Borrowings -0.47 -1.01 -4.39 -5.71 -9.34 -4.59 -1.46 -7.21 -1.60 -6.85

Total Current Liabilities -40.21 -44.25 -29.71 -36.54 -40.55 -37.60 -35.06 -40.00 -37.21 -39.21

Liabilities Directly Associated With Non-Current Assets Classified As Held For Sale -14.62 0.00 0.00 0.00 -1.44 -5.53 0.00 0.00 0.00 0.00

Total Liabilities -96.17 -131.51 -81.29 -90.43 -91.57 -98.74 -88.59 -90.33 -103.02 -96.97

Net Assets 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00

Share Capital 4.97 4.71 3.19 3.43 3.59 3.57 3.42 3.62 4.38 4.02

Retained Earnings 16.46 16.47 57.62 1.17 -1.81 2.24 6.11 7.17 4.90 11.66

Total Equity Attributable To Equity Holders Of The Company 99.80 99.91 99.94 99.90 99.89 99.58 99.68 98.80 93.72 94.55

Non-Controlling Interest 0.20 0.09 0.06 0.10 0.11 0.42 0.32 1.20 6.28 5.45

Total Equity 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00

Conditional highlighting represents positive or negative increase from the previous year.
 ACCOUNTING FOR DECISION MAKERS - ASSIGNMENT ONE | 23

Vertical Analysis Data: Income Statement

2017 2016 2015 2014 2013 2012 2011 2010 2009 2008

Sales 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

Cost Of Goods Sold -45.8 -46.0 -44.3 -45.2 -45.6 -44.0 -44.8 -45.7 -46.3 -45.2

Gross Profit 54.2 54.0 55.7 54.8 54.4 56.0 55.2 54.3 53.7 54.8

Operating Expenses -48.8 -55.0 -46.9 -47.7 -46.4 -43.8 -41.9 -41.9 -42.2 -41.3

Other Net Gains And Losses 2.8 0.0 0.0 0.0 0.0 0.0 7.0 0.0 0.0 0.0

Impairment Of Intangible Assets 0.0 -56.0 -19.0 0.0 0.0 -2.2 0.0 0.0 0.0 0.0

Share Of Results Of Joint Ventures And Associates 1.7 2.1 1.2 1.0 1.1 0.2 0.6 0.7 0.6 0.5

Operating Profit 10.0 -54.9 -9.0 8.2 9.0 10.2 20.9 13.1 12.0 14.1

Finance Costs -2.4 -2.1 -2.2 -2.9 -2.2 -2.2 -1.7 -1.9 -2.4 -2.8

Finance Income 1.8 0.8 1.6 1.0 0.7 0.6 0.4 0.6 0.5 0.9

Profit Before Tax 9.3 -56.2 -9.7 6.3 7.5 8.6 19.7 11.8 10.2 12.2

Income Tax -0.3 4.9 1.8 -1.3 -1.7 -2.9 -3.4 -2.6 -2.8 -3.6

Profit For The Year From Continuing Operations 9.0 -51.3 -7.9 5.0 5.8 5.7 16.3 9.3 7.3 8.6

Profit/Loss For The Year From Discontinued Operations 0.0 0.0 26.3 4.7 4.8 0.8 0.0 13.7 1.7 -1.9

Profit For The Year 9.0 -51.3 18.4 9.6 10.6 6.5 16.3 23.0 9.0 6.7

Conditional highlighting represents positive or negative increase from the previous year.
 ACCOUNTING FOR DECISION MAKERS - ASSIGNMENT ONE | 24

Ratio Analysis Data

2017 2016 2015 2014 2013 2012 2011 2010 2009 2008

Gross Profit Margin 54% 54% 56% 55% 54% 56% 55% 54% 54% 55%

Net Profit Margin 9% -51% 18% 10% 11% 7% 16% 23% 9% 7%

Return On Equity (Post Tax) 10% -43% 13% 8% 9% 6% 17% 25% 10% 7%

Return On Capital Employed 6% -29% -5% 3% 4% 5% 13% 8% 7% 9%

Current Ratio 1.6 2.1 2.1 1.3 1.2 1.4 1.8 1.9 1.9 1.7

Quick (Acid Test) Ratio 1.5 2.0 2.0 1.2 1.1 1.3 1.6 1.7 1.6 1.4

Non-Current Asset Turnover 0.85 0.67 0.56 0.60 0.68 0.70 0.84 0.89 0.80 0.84

Inventory Turnover 10.79 20.41 20.54 21.76 20.90 15.15 14.02 12.96 10.87 11.07

Trade Receivables Turnover 8.37 8.78 8.05 5.69 5.36 8.30 8.72 7.77 9.37 10.66

Days Payable Outstanding 262.4 263.2 275.5 257.4 241.6 270.5 232.7 216.6 221.9 208.1

Dividend Per Share 39.10 52.04 52.01 48.96 45.99 43.02 39.74 36.45 34.15 32.25

Dividend Cover 1.28 -5.51 1.95 1.19 1.45 0.94 3.01 4.44 1.56 1.14

Earnings Per Share 49.91 -286.82 101.19 58.08 66.51 40.53 119.60 161.88 53.17 36.64

Price Earnings Ratio 17.01 -2.96 8.39 14.62 12.77 20.95 7.10 5.25 15.97 23.18

Gearing Ratio 10% 20% 9% 21% 19% 14% 8% 7% 19% 23%

Interest Cover. 4 26 4 3 4 5 13 7 5 5

Return On Assets 2.27 -10.76 3.57 2.10 2.42 1.46 4.36 6.47 2.39 3.26

Conditional highlighting represents positive or negative increase from the previous year.
 ACCOUNTING FOR DECISION MAKERS - ASSIGNMENT ONE | 25

2017 2016 2015 2014 2013 2012 2011 2010 2009 2008

Debt Ratio -0.49 -0.57 -0.45 -0.47 -0.48 -0.50 -0.47 -0.47 -0.51 -0.49

Avg Total Assets 8977 10850.5 11516 11164 11139.5 11296 10956 10040 9654 8594

Avg Current Liabilities 1770.5 1915.5 2047 2250.5 2230.5 2118.5 2166 1983.5 1847.5 1849

Weighted Average Number Of Ordinary Shares (Millions) 813.4 814.8 813.3 810.9 808.9 804.3 800.2 801.2 799.3 797

Total Borrowings Being Total Drawn Debt 432 1072 654 1639 1379 918 499 430 1092 1460

Working Capital Ratio 1.56 2.12 2.15 1.34 1.24 1.45 1.83 1.86 1.85 1.66

Debt To Equity Ratio 0.11 0.25 0.10 0.27 0.24 0.16 0.08 0.08 0.24 0.29

Working Capital Per Revenue 0.089 0.020 0.024 -0.035 -0.059 -0.027 -0.013 -0.041 0.055 0.008

Conditional highlighting represents positive or negative increase from the previous year.
 ACCOUNTING FOR DECISION MAKERS - ASSIGNMENT ONE | 26

Peer Analysis for the year 2016-17

Pearson PLC RELX PLC Informa PLC

Gross Profit Margin 54% 64% 20%

Net Profit Margin 9% 22.60% 18%

Return On Equity (Post Tax) 10% 70% 14%

Current Ratio 1.6 0.5 0.4

Quick (Acid Test) Ratio. 1.5 0.4 0.4

Non-Current Asset Turnover 0.85 0.7 0.4

Inventory Turnover 10.79 36.2 33.0

Earnings Per Share 49.91 81.0 0.4

Price Earnings Ratio 17.01 19.9 19.6

Gearing Ratio 10% 67% 38%

Return On Assets 2.3 0.1 0.1

Dividend Per Share 39.10p 37.7p 19.68p

 ACCOUNTING FOR DECISION MAKERS - ASSIGNMENT ONE | 27

Industry Average for 2017

Q4 Q3 Q2 Q1 Average Pearson PLC

Quick Ratio 0.45 0.46 0.49 0.47 0.47 1.50

Working Capital Ratio 1.21 1.21 1.20 1.20 1.21 1.56

Gearing Ratio 1.40 1.45 1.35 1.36 1.39 0.10

Total Debt To Equity 0.02 0.02 0.01 0.02 0.02 0.11

Interest Coverage 9.12 6.23 3.08 4.73 5.79 4.00

Working Capital Per Revenue 0.06 0.06 0.06 0.06 0.06 0.09