Scribd Logo
Upload

Welcome to Scribd!

  • 15 views

    FINAL 2018 (1) Business Igcse

    Uploaded by

    josefina.delosreyes
    Dowson is a large retailer that owns many shops selling electrical goods. The finance director is pleased with the company's liquidity ratios but knows that its high debt levels, including a $6 million overdraft, need to be reduced given the economic recession. He believes the company's size gives it an advantage over smaller retailers that have failed. The document discusses Dowson's financial ratios and issues around its high debt levels.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd

    FINAL 2018 (1) Business Igcse

    Uploaded by

    josefina.delosreyes
    15 views1 page
    Dowson is a large retailer that owns many shops selling electrical goods. The finance director is pleased with the company's liquidity ratios but knows that its high debt levels, including a $6 million overdraft, need to be reduced given the economic recession. He believes the company's size gives it an advantage over smaller retailers that have failed. The document discusses Dowson's financial ratios and issues around its high debt levels.

    Original Description:

    business igcse

    Original Title

    FINAL 2018 (1) business igcse

    Copyright

    © © All Rights Reserved

    Available Formats

    PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Dowson is a large retailer that owns many shops selling electrical goods. The finance director is pleased with the company's liquidity ratios but knows that its high debt levels, including a $6 million overdraft, need to be reduced given the economic recession. He believes the company's size gives it an advantage over smaller retailers that have failed. The document discusses Dowson's financial ratios and issues around its high debt levels.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    15 views1 page

    FINAL 2018 (1) Business Igcse

    Uploaded by

    josefina.delosreyes
    Dowson is a large retailer that owns many shops selling electrical goods. The finance director is pleased with the company's liquidity ratios but knows that its high debt levels, including a $6 million overdraft, need to be reduced given the economic recession. He believes the company's size gives it an advantage over smaller retailers that have failed. The document discusses Dowson's financial ratios and issues around its high debt levels.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 1

    Name: __________ Date: _____

    th
    BUSINESS FINAL EXAM 6 2018

    1) Dowson is a large business which owns a number of shops. It sells a range of electrical goods such as
    computers and televisions. The Finance Director has been looking at some recent financial data, as shown in
    Table 1. He is pleased with Dowson's liquidity but knows he must reduce its high level of debt including an
    overdraft of $6m. He said: 'The economy is in recession. Many small retailers have failed. Size is an advantage!’

    a) What is meant by ‘Return on capital employed’? [2]


    b) Identify and explain two problems for Dowson of having a high level of debt. [6]
    c) Do you think the Finance Director is right to be pleased with the liquidity of the business? Justify your answer
    using the ratio results in Table 1. [6]

    2) Dhoni is a successful small business. It has five shops which sell kitchen equipment such as cooking pots and
    knives. Most of its products are sold to restaurants and hotels. The company has received a takeover offer of
    $700 000 from a large competitor. Dhoni’s shareholders have been looking at the accounts. They are not sure
    whether shareholders would benefit from the takeover. Dhoni’s return on capital employed was 7% in 2015 and
    9% in 2016.

    a) What is meant by a ‘non-current asset’? [2]


    b) Calculate the acid test ratio in 2016. [2]
    c) Identify and explain two reasons why Dhoni has trade receivables. [4]
    d) Identify two stakeholder groups (other than shareholders) and explain how they might use Dhoni’s accounts.
    [6]

    3) TWH makes a range of toys using batch production. TWH’s Managing Director, Dylan, plans to invest in new
    technology to reduce average costs. ‘It’s the only way to increase efficiency as I do not know how we can
    improve employees’ motivation’ he said. Dylan cannot decide on whether it would be better to use retained
    profits or a long term loan as the source of finance.

    a) Calculate the output per employee per week in 2014. [2]


    b) TWH can either use retained profit or a long term loan to finance the purchase of new technology. Which
    option do you recommend TWH should use? Justify your answer. [6]
    c) What is meant by ‘cost of sales’? [2]
    d) Refer to Table 2. Calculate: X and Y [2]

    You might also like

    pFad - Phonifier reborn

    Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

    Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


    Alternative Proxies:

    Alternative Proxy

    pFad Proxy

    pFad v3 Proxy

    pFad v4 Proxy