2020年ACCAF5考试主观题：有关财务表现的相关考题
来源：长理培训发布时间：2020-03-06 21:36:31
【Questions】
2 Ties Only is a new business, selling high quality imported men’s ties via the internet. The managers, who also own
the company, are young and inexperienced but they are prepared to take risks. They are confident that importing
quality ties and selling via a website will be successful and that the business will grow quickly. This is despite the
well recognised fact that selling clothing is a very competitive business.
They were prepared for a loss-making start and decided to pay themselves modest salaries (included in administration
expenses in table 1 below) and pay no dividends for the foreseeable future.
The owners are so convinced that growth will quickly follow that they have invested enough money in website server
development to ensure that the server can handle the very high levels of predicted growth. All website development
costs were written off as incurred in the internal management accounts that are shown below in table 1.
Significant expenditure on marketing was incurred in the first two quarters to launch both the website and new
products. It is not expected that marketing expenditure will continue to be as high in the future.
Customers can buy a variety of styles, patterns and colours of ties at different prices.
The business’s trading results for the first two quarters of trade are shown below in table 1
Table 1
Quarter 1 Quarter 2
$ $ $ $
Sales 420,000 680,000
less Cost of Sales (201,600) (340,680)
–––––––– ––––––––
Gross Profit 218,400 339,320
less expenses
Website development 120,000 90,000
Administration 100,500 150,640
Distribution 20,763 33,320
Launch marketing 60,000 40,800
Other variable expenses 50,000 80,000
–––––––– ––––––––
Total expenses (351,263) (394,760)
–––––––– ––––––––
Loss for quarter (132,863) (55,440)
–––––––– ––––––––
Required:
(a) Assess the financial performance of the business during its first two quarters using only the data in table 1
above. (12 marks)
(b) Briefly consider whether the losses made by the business in the first two quarters are a true reflection of the
current and likely future performance of the business. (4 marks)
The owners are well aware of the importance of non-financial indicators of success and therefore have identified a
small number of measures to focus on. These are measured monthly and then combined to produce a quarterly
management report.
The data for the first two quarters management reports is shown below:
Table 2
Quarter 1 Quarter 2
Website hits* 690,789 863,492
Number of ties sold 27,631 38,857
On time delivery 95% 89%
Sales returns 12% 18%
System downtime 2% 4%
* A website hit is automatically counted each time a visitor to the website opens the home page of Ties Only.
The industry average conversion rate for website hits to number of ties sold is 3·2%. The industry average sales return
rate for internet-based clothing sales is 13%.
Required:
(c) Comment on each of the non-financial data in table 2 above taking into account, where appropriate, the
industry averages provided, providing your assessment of the performance of the business.
(9 marks)
(25 marks)
【Answers】
2 Ties Only Limited(a) Financial performance of Ties Only LimitedSales GrowthTies Only Limited has had an excellent start to their business. From a standing start they have made $420,000 of sales andthen grown that figure by over 61% to $680,000 in the following quarter. This is impressive particularly given that we knowthat the clothing industry is very competitive. Equally it is often the case that new businesses make slow starts, this does notlook to be the case here.Gross ProfitThe gross profit for the business is 52% for quarter 1 and 50% for quarter 2. We have no comparable industry data providedso no absolute comment can be made. However, we can see the gross profit has reduced by two points in one quarter. Thisis potentially serious and should not be allowed to continue.The cause of this fall is unclear, price pressure from competitors is possible, who may be responding to the good start madeby the business. If Ties Only Limited is reducing its prices, this would reflect on the gross profit margin produced.,It could also be that the supply side cost figures are rising disproportionately. As the business has grown so quickly, it mayhave had to resort to sourcing extra new supplies at short notice incurring higher purchase or shipping costs. These could allreduce gross margins achieved.
Website developmentWebsite costs are being written off as incurred to the management accounting profit and loss account. They should be seenas an investment in the future and unlikely to continue in the long term. Website development has been made with the futurein mind; we can assume that the future website costs will be lower than at present. Taking this into consideration the lossmade by the business does not look as serious as it first appears.Administration costsThese are 23·9% of sales in quarter 1 and only 22·1% of sales in quarter 2. This could be good cost control, impressivegiven the youth and inexperience of the management team.Also any fixed costs included in the cost (directors’ salaries are included) will be spread over greater volume. This would alsoreduce the percentage of cost against sales figure. This is an example of a business gaining critical mass. The bigger it getsthe more it is able to absorb costs. Ties Only Limited may have some way to go in this regard, gaining a much greater sizethan at present.Distribution costsThis is a relatively minor cost that again appears under control. Distribution costs are likely to be mainly variable (postage)and indeed the proportion of this cost to sales is constant at 4·9%.Launch marketingAnother cost that although in this profit and loss account is unlikely to continue at this level. Once the ‘launch’ is completethis cost will be replaced by more general marketing of the website. Launch marketing will be more expensive than generalmarketing and so the profits of the business will improve over time. This is another good sign that the results of the first twoquarters are not as bad as they seem.Other costsAnother cost that appears under control in that it seems to have simply varied with volume.(b) Although the business has lost over $188,000 in the first two quarters of its life, this is not as disastrous as it looks. Thereasons for this view are:– New businesses rarely breakeven within six months of launch– The profits are after charging the whole of the website development costs, these costs will not be incurred in the future– Launch marketing is also deducted from the profits. This cost will not continue at such a high level in the futureThe major threat concerns the fall in gross profit percentage which should be investigated.The owners should be relatively pleased with the start that they have made. They are moving in the right direction and withoutwebsite development and launch marketing they made a profit of $47,137 in quarter 1 and $75,360 in quarter 2.If sales continue to grow at the rate seen thus far, then the business (given its ability to control costs) is well placed to returnsignificant profits in the future.The current profit (or loss) of a business does not always indicate a business’s future performance.(c) Non-financial indicators of successWebsite hitsThis is a very impressive start. A new business can often find it difficult to make an impression in the market. Growth in hitsis 25% between the two quarters. If this continued over a year the final quarter hits would be over 1·3m hits. The internetenables new businesses to impact the market quickly.Number of ties soldThe conversion rates are 4% for quarter 1 and 4·5% for quarter 2. Both these figures may seem low but are ahead of theindustry average data. (Industry acquired data must be carefully applied, although in this case the data seems consistent). Itappears that the business has a product that the market is interested in. Ties Only Limited are indeed looking competitive.We can use this statistic to calculate average price achieved for the tiesQuarter 1$420,000= $15·20 per tie –––––––––27,631Quarter 2$680,000= $17·50 per tie –––––––––38,857This suggests that the fall in gross profit has little to do with the sales price for the ties. The problem of the falling gross profitmust lie elsewhere.On time deliveryClearly the business is beginning to struggle with delivery. As it expands, its systems and resources will become stretched.Customers’ expectations will be governed by the terms on the website, but if expectations are not met then customers maynot return. More attention will have to be placed on the delivery problem.
Sales returnsReturns are clearly common in this industry. Presumably, ties have to be seen and indeed worn before they are accepted assuitable by customers. The concern here is that the business’s return rate has jumped up in quarter 2 and is now well abovethe average for the industry. In other words, performance is worsening and below that of the competitors. If the business isunder pressure on delivery (as shown by the lateness of delivery) it could be that errors are being made. If wrong goods aresent out then they will be returned by disappointed customers.The alternative view is that the quality of the product is not what is suggested by the website. If the quality is poor then theproducts could well be returned by unhappy customers.This is clearly concerning and an investigation is needed.System down timeSystem down time is to be avoided by internet based sellers as much as possible. If the system is down then customerscannot access the site. This could easily lead to lost sales at that time and cause customers not to try again at later dates.Downtime could be caused by insufficient investment at the development stage (we are told that the server was built to ahigh specification) or when the site is under pressure due to peaking volumes. This second explanation is more likely in thiscase.The down time percentage has risen alarmingly and this is concerning. Ideally, we would need figures for the averagepercentage down time achieved by comparable systems to be able to comment further.The owners are likely to be disappointed given the level of initial investment they have already made. A discussion with thewebsite developers may well be warranted.SummaryThis new business is doing well. It is growing rapidly and ignoring non-recurring costs is profitable. It needs to focus ondelivery accuracy, speed and quality of product. It also needs to focus on a remedy for the falling gross profit margin.Workings1. Gross profitQuarter 1: Quarter 2:218,400= 52%339,320= 50% –––––––– ––––––––420,000 680,0002. Website conversion ratesQuarter 1: Quarter 2:27,631= 4%38,857= 4·5% –––––––– ––––––––690,789 863,4923. Website hits growthBetween quarter 1 and quarter 2 the growth in website hits has been:863,492= 1·25 = 25% ––––––––690,789
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