Net profit is a good indicator of the efficiency of a firm. The net profit ratio or net profit margin ratio is determined by relating net income after taxes to net sales. Net profit here is the balance of profit and loss account which is arrived at after considering all non-operating incomes such as interest on investments, dividends received, etc. And non-operating expenses like loss on the sale of investments, provisions for contingent liabilities, etc.
i) The issued share capital of Mbeya Trust, a publicly listed company on the Dar es Salaam Stock Exchange, on 31st March 2013 was TZS 10 million. Its shares are denominated at TZS 25 each. Mbeya Trust’s earnings attributable to its ordinary shareholders for the year ended 31st March 2013 were also TZS10 million, given an earnings per share of TZS 25.
A Right issue of shares is an issue of shares at a special price by a company to its existing shareholders in proportion to their holding of old shares.