Income Statement Yr 1 Income Statement Yr 2

£000's
Sales 1,000 Sales
Less Cost of Sales 200 Less Cost of Sales
Gross Profit 800 Gross Profit

Less Expenses 500 Less Expenses

Profit for the Year 300 Profit for the Year

Compare these two Income Statements and answer the following questions:

1 Has this business improved or got worse in Yr 2?

Worse
2 State what has happened to:

Sales Income Decrease of 100k

Cost of Sales increase 50k
Expenses increase 50k
PFTY decrease of 200k

3 State how this business could improve its performance. (3 different ways).

Provide Discounts
Improve marketing
Find a cheaper supplier
Increase price of product
 £000's
900
250
650

550
100

nce. (3 different ways).

Statement of Financial Position Statement of Financial Position
Yr 1 £000's £000's £000's Yr 2 £000's £000's

Non-Current Assets 2,000 Non-Current Assets

Current Assets Current Assets

Trade Receivables 200 Trade Receivables 300
Cash 50 250 Cash 30 330

Less Current Liabilities Less Current Liabilities

Trade Payables 160 Trade Payables 270
Dividends 90 250 Dividends 260 530
Working Equity 0 Working Equity
Net Assets Employed 2,000 Net Assets Employed

Non-Current Liabilities Non-Current Liabilities

Loan 1500 Loan
500
Equity and Reserves Equity and Reserves
Ordinary Share Capital 200 Ordinary Share Capital
Retained Profit 300 Retained Profit
Net Assets 500 Net Assets
1,950

-200
1,750

1400
350

200
150
350