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With Reference to the Data in Appendix B, Figure 3, Do You Think the Shareholders of Scott Electronics Plc Will Be Pleased with the Company’s Financial Performance in 2011?

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The Head of New Product Development, David Perryman, has been set the objective of devising a project to increase the profitability of Scott Electronics PLS and to provide a greater dividend to shareholders. One reason to why shareholders may be pleased with the company’s financial performance in 2011 is due to the fact that the total dividends have increased from £1m in 2010 to £2m in 2011, which is shown in figure 3. The dividend per share measure the overall profit generated for each share in existence over a particular period. It simply looks at the dividend obtained from each share a shareholder owns. This is expressed in terms of the number of pence per share. This amount will normally be paid in two instalments. Using Appendix B I can calculate that the divined per share in 2010 was 20p and has increased by 100% to 40p in 2011. The dividend yield allows investors to see what percentage return they are getting from their investment. It also measures the proportion of earnings that are being retained by the business rather than distributes as dividends. Again using Appendix B I can calculate that the dividend yield in 2010 was 13.3% and in 2011 it increased by 50.3% to 20%. As both the dividend per share and dividend yield have increased shareholders will be making an increased profit which will not only encourage them to retain their profits back into the company, but it will also encourage them to continue supporting Scott Electronic Plc, and not look to buying shares in competitor’s such as Apple. In addition to this it will also make the shares at Scott Electronics more attractive from their shares and could potentially interest new investors. Also from figure 3 I can calculate the current ratio. The current ratio is a simple measure that estimates whether the business can pay debts due within one year from assets that it expects to turn into cash within

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With Reference to the Data in Appendix B, Figure 3, Do You Think the Shareholders of Scott Electronics Plc Will Be Pleased with the Company’s Financial Performance in 2011

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