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 below is disclosed on a voluntary basis.
The assumptions used in computing the economic profit 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
1st Quarter 2008 = 1.303
4th Quarter 2007 = 1.332
(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 31 March 2008 3.792%
At 31 December 2007 4.130%
(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.
3 months (Unaudited)
|Group profit after taxation||19,607||53,319|
|Less: Cost of capital employed||(12,930)||(49,158)|