Chapter 16 • Small businesses
Balance sheet as at the end of last year
£m £m
Non-current assets
Freehold land and buildings at cost 5.9
Depreciation (1.0) 4.9
Plant at cost 12.7
Depreciation (5.1) 7.6
12.5
Current assets
Inventories 4.3
Trade receivables 0.7
Cash at bank 2.6
7.6
Total assets 20.1Equity
Ordinary shares of £1 each 3.2
Retained profits 3.5
6.7
Non-current liabilities
Loan notes 4.7
Current liabilities
Trade payables 6.1
Taxation 2.6
8.7
Total equity and liabilities 20.1Analysts estimate that the net cash flows of Alcantage Ltd, after taking account of
tax and the need to replace non-current and current assets, will be:£m
Next year 6.7
Year 2 7.1
Year 3 7.5
Year 4 8.2
Year 5 and thereafter 8.5The cost of equity of businesses in the industry, taking account of the level of cap-
ital gearing, is 12 per cent.
Professional valuers have recently assessed some of Alcantage Ltd’s assets to
have market values as follows:£m
Freehold land and buildings 12.3
Plant 6.2
Inventories 4.8