BUS1AFB Accounting And Finance For Business - Assignment Solution

TASK -2

Domino pizza Expected Return

Expected return= 49% (average of the last five year’s return)

=0.05-0.21+0.95+0.71+0.96/5=49%

Retail Food Expected Return

Expected return= -4% (average of the last five year’s return)

=-0.85-0.04+0.12+0.30+0.27/5 = -4%

TASK-3

Domino pizza – total return to share holders

Total return to share holder=40% 

(51+ (1.03+0.872+0.619+0.436+0.1984+0.155)/10.66)1/5 -1 = 40%

Retail food- total return to shareholders

Total return to shareholders = -2%

(0.54 + (0.15+0.29250+0.2475+ 0.2275+0.21+0.095)/3.1785)1/5 -1 = -2%

TASK-4

Comparison between the share prices of the two corporations

The retail food group has lost its share price by quite a bit in the last 5 years’ time while domino pizza continues to grow its share price apart from one year the prices have always been on the rise. This shows that the demand for retail group’s share reduced while for that of domino pizza it raised for the most part of the last five years, this is a clear indicator of the fact that Domino Pizza has outperformed Retail food group when it comes to being a better investment opportunity.   

TASK-5

 ANNUAL GROWTH IN EARNING PER SHARE

Formula: diluted eps 2018 – diluted eps 2017/ diluted eps 2017

Dominos pizza

 139-114.7/114.7= 0.21= 21%

Retail food

-170-36/36 =  -5.75= - 575% 

Net profit margin

Formula: profit for period of continued operation/ revenue

 Dominos pizza

121,693/ 794,072= 15%

Retail food

-306,693/ 297,719 = -103%

Asset turnover ratio

Formula: revenue /average total asset 

Dominos pizza

794,072/1,217,602 = 65%

Retail food

297,719/765,069 = 39%

Leverage ratio

Formula: average total assets/ average total equity

  Dominos pizza

1,217,602/361,364 = 3.37

Retail food

765,069/311606 = 2.46

Return on equity

Formula: profit for the period of continued operations/ average total equity 

Dominos pizza

121,693/ 361,364 = 34%

 Retail food

-306,693/ 765,069 = -40%