Teachers� Info by ns42j3


									Teachers’ Info.

Many thanks for the competition entries. We will be sending a prize to Kauri Chiu of
Ackworth School, West Yorks, as her entry was very good. Other than that we will wait till
the end of October for other entries, as staff who did not supply their email addresses were
unaware of the competition until the end of September. So if you wish to send in any other
entries, by all means do so.

I have been struggling with Business Review over the past few weeks and have therefore been
unable to devise a new competition, but I’ll do so for November.

Partly by way of compensation, see below for a couple of resources of use in teaching
company accounts. I hope you find them useful. Ted Baker (fashion clothing) seemed to be of
great interest to my students (especially its margins). I used the sheet (which is a simplified
version of the firm’s published accounts) as the basis for initial ratio calculations by my
students. The other sheet is a straightforward accounts exercise.

I hope your students aren’t too depressed by the open season on A Levels at the moment.

Best wishes,

                   Ian Marcousé

                         Annual Report & Accounts – Ted Baker plc

                               Profit & Loss Account (year end January 31st)

                                                 2002               2001
                                                 £000s              £000s
         Sales turnover                          46,999             36,737

         Cost of sales                           19,719             14,970

         Gross profit                            27,280

         Overhead expenses                       19,125             13,896

         Operating profit                          8,155

         One-off profits/losses                      -                 -

         Pre-tax profit                            8,155              7,871

         Corporation tax                           2,321              2,173

         Dividends*                                2,889              2,600

         Retained profit                           2,945              3,098

                                  Balance sheet as at January 31st
                                                 2002               2001
                                                 £000               £000

         Fixed assets                            12,274             9,090

         Stock                                   12,654             8,466
         Debtors                                  5,838             3,243
         Cash                                       313               167

         Trade creditors                          4,661             4,819
         Other current liabilities               13,543             5,996

         Net current assets                          601            1,061

         ASSETS EMPLOYED                         12,875            10,151

         Long term loans/liabilities                 0                235

         Share capital                             3,036            3,018
         Reserves                                  9,839            6,898

         CAPITAL EMPLOYED                        12,875            10,151

*Shares issued: 41,260,000 shares. Stock market price as at 31/1/02 = 210p

                               Data Response question: Balance Sheets

At the Annual General Meeting, the Chairman of Dazona Plc was upbeat about the
company's performance. He said: "Sales are up £150 000 to £1150 000 while our cost of
sales rose by just £120 000 to £720 000 in 2002. Return On Capital is now a satisfactory 10%
per year. We are confident that Dazona is now one of the most successful bakeries in the

Look carefully at Dazona's balance sheet, then answer the questions below.

               Dazona Plc Balance sheet as at December 31st

                                         2002              2001
                                        £000s              £000s

   Fixed assets                           820               560

   Stock                                  240               160
   Debtors                                200               180
   Cash                                    40                60

   Creditors                             (400)             (300)

   Net current assets              x=

   ASSETS EMPLOYED                  y=

   Loans                                  540               330
   Share capital                           60                50
   Reserves                               300               280

   CAPITAL EMPLOYED                 z=

                                   QUESTIONS (25 marks)

a) Fill in the missing numbers.                                                 (6)

b) Explain the term fixed assets. Give two examples.                            (4)

c) What alternative name might be given to Net Current Assets?                  (1)

di) Calculate Dazona's stock turnover in 2002.                                  (2)

dii) How well do you think Dazona is managing its stock levels?                 (3)

ei) How has Dazona financed its expansion during 2002?                          (3)

eii) Discuss the effects this may have upon the business.                       (6)


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