Additional question 25
The table below contains the common size statements of eight different business, the industry/sector in which these business operate are given at the end of the table.
Your job is to decide which business belongs in which industry/sector. For example, if you think that business 1 is a retail organisation then your answer will be 1 = retail organisation
The following ratios also relate to these businesses and they might be helpful in helping you to arrive at your decisions:
| Year 1 Common Size Statements | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
|---|---|---|---|---|---|---|---|---|
| Consolidated Profit and Loss Account | ||||||||
| Turnover | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% |
| Cost of sales | -88.59% | -94.38% | -90.36% | -72.54% | -88.01% | -10.45% | 0.00% | -64.86% |
| Gross profit | 11.41% | 5.62% | 9.64% | 27.46% | 11.99% | 89.55% | 100.00% | 35.14% |
| Operating expenses | -5.95% | -0.83% | -1.82% | -16.59% | 0.00% | -62.41% | -244.32% | -23.41% |
| Operating profit | 5.45% | 4.79% | 7.81% | 10.87% | 11.99% | 27.15% | -144.32% | -10.48% |
| Other costs/income | -3.83% | -0.73% | -0.45% | 0.00% | 0.64% | 0.00% | 4.46% | 0.00% |
| Profit before interest and taxation | 1.63% | 4.05% | 7.36% | 10.87% | 12.63% | 27.15% | -139.86% | -10.48% |
| Net interest receivable (payable) | 0.17% | -2.44% | -2.39% | -2.49% | -1.20% | -0.76% | 20.77% | -0.36% |
| Profit on ordinary activities before taxation | 1.80% | 1.62% | 4.97% | 8.38% | 11.44% | 26.39% | -119.09% | -10.84% |
| Tax on profit on ordinary activities | -1.85% | -0.74% | -1.45% | 0.00% | -3.36% | -8.44% | 0.00% | -3.61% |
| Profit on ordinary activities after taxation | -0.05% | 0.87% | 3.52% | 8.38% | 8.08% | 17.94% | -119.09% | -14.45% |
| Equity minority interests | -0.02% | -0.15% | -0.01% | 0.00% | -0.06% | 0.02% | 0.00% | -3.19% |
| Profit for the financial period | -0.07% | 0.72% | 3.52% | 8.38% | 8.02% | 17.96% | -119.09% | -17.64% |
| Dividends | -3.20% | -2.08% | 0.00% | 0.00% | -3.12% | -1.19% | 0.00% | 0.00% |
| Retained profit | -3.27% | -1.36% | 3.52% | 8.38% | 4.89% | 16.77% | -119.09% | -17.64% |
| Consolidated Balance Sheet | ||||||||
| Fixed assets | ||||||||
| Intangible Assets | 0.00% | 2.58% | 44.23% | 4.81% | 22.83% | 118.91% | 0.00% | 36.58% |
| Tangible assets | 89.90% | 458.58% | 121.98% | 307.62% | 101.58% | 10.23% | 21.48% | 21.11% |
| Investments | 6.95% | 18.32% | 3.41% | 0.00% | 15.88% | 0.00% | 0.00% | 0.00% |
| Total Fixed Assets | 91.18% | 479.48% | 169.62% | 312.43% | 140.29% | 129.14% | 21.48% | 57.68% |
| Current assets | ||||||||
| Stock | 10.31% | 7.31% | 1.02% | 0.00% | 13.34% | 0.55% | 0.83% | 12.82% |
| Debtors due within one year | 57.39% | 62.11% | 14.15% | 62.33% | 38.40% | 18.78% | 14.24% | 19.34% |
| Short-term investments | 0.00% | 37.20% | 0.00% | 0.00% | 0.89% | 0.00% | 0.00% | 0.00% |
| Cash at bank and in hand | 3.37% | 3.05% | 3.44% | 21.44% | 1.58% | 14.61% | 97.12% | 33.05% |
| 76.75% | 109.68% | 18.62% | 83.76% | 54.21% | 33.95% | 112.19% | 65.22% | |
| Creditors: Amounts falling due within one year | 43.25% | -142.28% | -36.17% | -128.56% | 52.06% | -24.24% | -21.71% | -20.97% |
| Net current assets (liabilities) | 33.50% | -32.60% | -17.55% | -44.79% | 2.15% | 9.70% | 90.48% | 44.25% |
| Total assets less current liabilities | 124.67% | 446.88% | 152.07% | 267.64% | 142.44% | 138.84% | 111.96% | 101.93% |
| Creditors: Amounts falling due after more than one year | 16.05% | -296.82% | -51.00% | -164.82% | -25.15% | -17.27% | -11.96% | -0.78% |
| Provisions for liabilities and charges | 8.63% | -50.06% | -1.07% | -2.82% | 17.29% | -21.58% | 0.00% | -1.15% |
| Net assets | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% |
| Capital and reserves | ||||||||
| Called-up share capital | 15.65% | 11.66% | 6.01% | 70.98% | 7.64% | 2.79% | 6.98% | 2.19% |
| Share premium | 0.00% | 33.89% | 68.18% | 0.00% | 0.00% | 95.20% | 251.91% | 95.14% |
| Other reserves | 18.20% | 12.47% | 9.16% | 0.00% | 0.00% | 13.45% | 41.54% | -0.47% |
| Profit and loss account | 65.81% | 33.20% | 16.51% | 29.02% | 91.57% | -11.46% | -202.94% | 3.14% |
| Equity shareholders' funds | 99.66% | 91.23% | 99.86% | 100.00% | 99.21% | 99.98% | 100.00% | 100.00% |
| Minority interests | 0.34% | 8.77% | 0.14% | 0.00% | 0.79% | 0.02% | 0.00% | 0.00% |
| Total capital employed | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% |
| Ratios | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
|---|---|---|---|---|---|---|---|---|
| Return on Capital Employed | -0.12% | 3.16% | 5.56% | 33.63% | 16.17% | 16.29% | -38.75% | -7.44% |
| Asset Turnover | 1.93 | 0.83 | 0.93 | 1.28 | 1.43 | 0.70 | 1.52 | 0.04 |
| Stock Turnover Ratio (Days) | 24.11 | 7.09 | 2.61 | 0.00 | 27.65 | 21.10 | n/a | n/a |
| Debtors Turnover Ratio (Days) | 118.84 | 56.81 | 32.73 | 56.69 | 70.06 | 75.60 | 159.78 | 249.58 |
| Acid Test Ratio | 1.54 | -0.72 | -0.49 | -0.65 | 0.79 | -1.38 | -5.13 | 19.58 |
| Gearing Ratio | 0.16 | -3.25 | -0.51 | -1.65 | -0.25 | -0.17 | -0.12 | 0.01 |
The industry/sector in which a business can operate must be taken from the following list:
- Accounting Software Developer and Supplier
- Established International Airline
- Leisure and Hotels
- Manufacturer
- New Discount Airline
- Oil Extraction and Refining
- Retailer
- Scientific Research
Did you get this?
You can now try Additional question 26.
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