So I am starting to work through the restating process using Chapter 4 as a guide.
Step 1: quantify abnormal earnings, here goes something or nothing.
At the heart of AE is the firms return on equity.
I have used the consolidated statement of changes in equity (Kier Group 2010 AR pg65, available in our Dropbox area). Opening balance was 89.3M GBP, marked as At 30 June 2009. Closing balance was 104.2M GBP, marked At 30 June 2010. Book value seems to be the average for the year i.e. 96.8M GBP.
So far so good.
Now to tackle comprehensive income....
Looking at the Consolidated cash flow statement (Kier Group 2010 AR pg 67) there is a line item:
Net cash generated from operating activities @115.0M GBP.
Therefore I get ROE = 115/96.8 = 119% but this way too good.
I haven't yet looked back at other years so where are you guys at?
So having a look back I might need to try and work through the comprehensive income calc again. Did anybody out there successfully use the Ryman 2008 AR and follow Martin's example in the text?
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