Celtic Springs, a public limited company, is a water bottling business. Its shareholders have been unhappy with the performance of the business and are threatening to take action at the next Annual General Meeting (AGM). Table 1 shows an extract from the company’s latest Profit/Loss Account. Table 1: Celtic Springs Profit/Loss Account 2011 ($m) Sales revenue ? Cost of sales Gross profit ? Overheads/expenses Net profit The accounts of the business also show that the capital employed by Celtic Springs was $650m. Calculate gross profit and sales revenue in 2011. Gross profit: Sales revenue: Identify two functions of an Annual General Meeting. Function 1: Function 2: Identify and explain two ways Celtic Springs could reduce its cost of sales. Way 1: Explanation: Way 2: Explanation: Identify and explain three reasons why profit is important to a company such as Celtic Springs. Reason 1: Explanation: Reason 2: Explanation: Reason 3: Explanation: Do you think that the shareholders of Celtic Springs are right to be unhappy with the company’s performance? Justify your answer using the data provided. 7115_w12_qp_12 THEORY 2012 Paper 1, Variant 2 View
BFF makes a range of computer screens that it sells to other manufacturers. The Managing Director has been looking at BFF’s income statement. She is worried about the effects of an increase in the cost of materials. She said: ‘Changes in technology have improved our production methods. BFF needs to remain competitive as imports of computer screens are increasing.’ The Managing Director has to decide whether BFF should increase its prices. What is meant by ‘income statement’? Identify the effect of an increase in the cost of materials on each of the following: Cost of sales: Gross profit: Identify and explain two ways in which BFF’s managers could use information contained in the income statement. Way 1: Explanation: Way 2: Explanation: 1 3 Identify and explain two ways changes in technology used in production could help BFF to remain competitive. Way 1: Explanation: Way 2: Explanation: Do you think BFF should increase its prices? Justify your answer. [ 1 3 7115_w19_qp_11 THEORY 2019 Paper 1, Variant 1 View