ECONOMIC PROFIT AND LOSS STATEMENT FOR THE PERIOD ENDED 30 SEPTEMBER 2010
Economic profit or loss is an amount earned for a period by a business after deducting the operating expenses and a charge of opportunity cost of capital employed. The economic profit and loss statement set out in Table 1 is disclosed on a voluntary basis.
The assumptions used in computing the economic profit/loss are set out below:
(i) The cost of equity is calculated based on the following formula:
Cost of equity = (Beta x Market Risk Premium) + Risk Free Rate
(ii) The Beta used in the calculation is the 5 years adjusted Bloomberg Rate:
Quarterly Period Beta
3rd Quarter 2010=1.409
2nd Quarter 2010=1.398
1st Quarter 2010=1.396
(iii)The risk free rate is the rate of return of a 10-year Malaysian Government Securities at the closing of the reporting period:
Risk Free Rate
At 30 September 2010=3.610%
At 30 June 2010=3.910%
At 31 March 2010=4.160%
(iv) The market risk premium is assumed at 5.2%, which represents the market return in excess of the return earned on risk free asset.
| Table 1 |
30 Sep 2010 (Unaudited)
RM’000
|
30 Sep 2009 (Unaudited)
RM’000
|
| Group profit after taxation |
133,213
|
73,203
|
| Less: Cost of capital employed |
(43,431)
|
(60,772)
|
| Economic profit/(loss) |
89,782
|
12,431
|
