Problem 1: A shopkeeper employs several assistants. For the year ended 30 April 2000 her gross profit ratio was 40% and gross profit was $80,000.
For the year ended 30April 2001 her gross profit ratio was 35%
Even though her gross profit had increased to $90,000.
State five possible reasons for the decrease in her gross profit ration.
State three ways in which she may improve her return on Capital.
Problem 2: Explain the following terms. Cost center and Cost units.
Problem 3: In what ways might investment decisions be affected By non-financial factors?
Problem 4: State and explain two advantages that Discounted Cash flow Has over Payback as a method of Capital investment appraisal.
Problem 5: Define Prudence.
Problem 6: Discuss how the concept of prudence might be relevant when Considering
1. Goodwill
2. The Valuation of Stock in Trade.
Problem 7: It has been suggested that any department that is making a Loss should be closed. Comments on this suggestion.
Problem 8: The Company needs to improve the premises but the bank Refuses either to allow a further increase in overdraft Or to grant a loan.
State six other possible sources of finance.
Problem 9: State Six shortcomings or dangers in using ration analysis.