1. Posts in the subject areas are now being moderated. Please do not post any details about your exam for at least 3 working days. You may not see your post appear for a day or two. See the 'Forum help' thread entitled 'Using forums during exam period' for further information. Wishing you the best of luck with your exams.
    Dismiss Notice

Interpreting accounts Chapter 26

Discussion in 'SP7' started by Adithyan, May 28, 2018.

Tags:
  1. Adithyan

    Adithyan Very Active Member

    Hi,

    This is related to page 18 of the chapter 26 in ST7.

    I would like to know how the following ratios have been calculated in the page. It would be helpful if one of the figures for each of the items below is shown with a calculation.

    Retained profit
    Investment return
    Return on capital
    Assets to liabilites.

    Kindly help!

    Thank you in advance

    Regards
    Amarnath
     
    Last edited: May 28, 2018
    Adithyan, May 28, 2018
    #1
  2. Hemant Rupani

    Hemant Rupani Senior Member

    Retained profit= Shareholders' fund at t - Shareholders' fund at (t-1)

    Investment return= (Investment income on Insurance funds + Other investment income)/([Total assets at t + Total assets at (t-1)]/2)

    Return on capital= (Net premiums earned - Net claims incurred - Expenses and commissions + Increase in DAC + Investment income on insurance funds + Other investment income)/(Shareholders' fund at (t-1)) ... (I think average shareholders' fund would also be fine.)

    Assets to liabilities=Total assets/(Total assets - Shareholders' fund)
     
    Hemant Rupani, Jun 7, 2018
    #2
    Adithyan likes this.
  3. Adithyan

    Adithyan Very Active Member

    Thank you very much Hemant! Your answer has been extremely helpful
     
    Adithyan, Jun 8, 2018
    #3

Share This Page