I. 1. What does the profit and loss account of a company show? What does a company’s balance sheet show?
2. If you were the company’s bankers, what would you look for when reading the aforementioned documents?
II. Read the financial data produced by British Airways and published on the Internet for investors and mark the following statements T (true) or F (false) according to the information given. The profit and loss account and the balance sheet have each six corresponding sentences:
1. The total Group turnover increased slightly on the previous year.
2. Salaries paid to employees are part of the operating costs.
3. Interest payable on loans is deduced from the profit after tax.
4. British Airways sold off some of its assets in 1998.
5. All the profit is distributed to shareholders.
6. Earnings per share were lower than in the previous year.
7. The airline’s fixed assets include aircraft.
8. The company had acquired new aircraft since the previous year.
9. The amount of current assets was greater than the amount of current liabilities.
10. Net current liabilities are calculated by deducting current liabilities from total assets.
11. British airways had issued more than a billion shares at the time of publishing these accounts.
12. British Airways had increased its reserves since the previous year.
