Instructions
Read the scenarios and choose from the dropdown list the most appropriate source of finance and then give a reason for your decision. Once you have considered all three scenarios you will have the opportunity to print out your notes.
1. Is the comparison between the businesses a fair one?
2. Which business has performed the best in the five years?
3. What other information is needed to help the comparison?
4. Compare the GPM and NPM for each business. What does this tell us?
5. Explain how the comparison would be the same/different if we just looked at the 2015 figures.
1. Is the comparison between the businesses a fair one?
2. Which business has performed the best in the five years?
3. What other information is needed to help the comparison?
4. Compare the GPM and NPM for each business. What does this tell us?
5. Explain how the comparison would be the same/different if we just looked at the 2015 figures.
Daisy Garden Centre Ltd
| Revenue and profit data | (£000) | ||||
|---|---|---|---|---|---|
| Daisy Garden Centre Ltd | 2011 | 2012 | 2013 | 2014 | 2015 |
| Revenue | 125 | 140 | 145 | 160 | 200 |
| Gross profit | 90 | 110 | 120 | 130 | 140 |
| Net profit | 20 | 25 | 25 | 35 | 40 |
| GPM | ...... % |
...... % |
...... % |
...... % |
...... % |
| NPM | ...... % |
...... % |
...... % |
...... % |
...... % |
Greenacres Garden Supplies Ltd
| Revenue and profit data | (£000) | ||||
|---|---|---|---|---|---|
| Greenacres Garden Supplies Ltd | 2011 | 2012 | 2013 | 2014 | 2015 |
| Revenue | 50 | 50 | 60 | 65 | 75 |
| Gross profit | 15 | 20 | 22 | 24 | 30 |
| Net profit | 9 | 10 | 12 | 12 | 14 |
| GPM | ...... % |
...... % |
...... % |
...... % |
...... % |
| NPM | ...... % |
...... % |
...... % |
...... % |
...... % |