Passage 1
Last year was a satisfactory year for MacGregor's with sales rising 15% compared to the previous twelve months. The profit before tax increased by 22% and the after-tax profit showed an increase of 31%. The disparity between the pre-tax and after-tax figures was due to the increase in the proportion of our profits earned overseas. These profits generally attracted a lower rate of tax than the rate charged in the UK.
Engineering Division
The performance was good not only in relation to previous years but also in comparison with other British engineering companies. The return on capital increased by 31% and the Division, even after capital expenditure of over &2 million, generated in excess ofe 3 million in cash for the group. We intend to implement expansion plans for the Division which include investment in new manufacturing facilities and a major overhaul of some existing equipment.
Plastic Division
Despite the difficulties in the home market trading levels were maintained as a result of our successful concentration on export markets. Our Belgian subsidiary, however, experienced such a low volume of orders that it was unable to do more than contain its losses. This is a company which, it should be noted, has a high break-even point.
Finance
The company's liquidity is so strong that our net borrowings are less than 25% of our total share capital and reserves. As a result we have a borrowing capacity of several million pounds. If we require higher investment as consequence of an improvemer in trade,we intend to obtain funds by bank borrowing which, despite high interest rates, would be the cheapest way of raising money. Should additional cash be required for an acquisition, the board will consider the possibility of raising more capital.
Earnings
The net worth of our ordinary shares is 154p compared with a market price of half that figure. The earnings are 15.8p per share and the total dividend for the year amounts to 5.2p.There is every reason to be optimistic about the company's prospect in the current year. The higher the inflation rate, however, the more difficult it will be to maintain our profit position. Last year, I asked you to be realistic in your expectations and to remember the difficult trading conditions. This year I repeat that advice in view of the world economic recession.
The market price of MacGregor's ordinary shares is about ____
A.77p
B.154p
C.231p
D.308p
正确答案是A