Answer no 1:

Income Statement for Media Marketing for the year ended 31st August 2022:
Sales £1,150,850
Food & Drink Purchases £62,455
Opening Stock of Food & Drink £15,590
Closing Stock of Food & Drink £22,350
Salaries & Wages £477,687
Motor & Travel Expenses £13,200
Insurance £64,788
Advertising £70,260
Rent & Rates £195,398
Professional Charges £125,060
Loan Interest £20,654
Repairs and Maintenance £9,778
Miscellaneous Expenses £13,877
Depreciation of Fixtures & Fittings ) £9,141 (15% of £60,940)
Depreciation of Computers and IT £46,976 (20% of £234,880)
Equipment
Depreciation of Kitchen Equipment £4,450 (10% of £44,500)
Depreciation of Motor Vehicles £4,000 (10% of £40,000)

Total Expenses £1,147,994

Net Profit £2,856
Answer no 2:
Statement of Financial Position for Media Marketing as at 31st August 2022:
Assets

Bank £34,777
Trade Receivables £75,300
Stock of Food & Drink £22,350
Fixtures & Fittings (at cost - depreciation) £51,799 (£60,940 - £9,141)
Kitchen Equipment (at cost - £40,050 (£44,500 - £4,450)
depreciation)
Computers and IT Equipment (at cost - £187,904 (£234,880 - £46,976)
depreciation)
Motor Vehicles (at cost - depreciation) £36,000 (£40,000 - £4,000)
Total Assets £448,180

Liabilities:
Bank Loan £254,000
Trade Payables £14,720
Total Liabilities £268,720
Net Assets: £179,460

Equity:
Capital £185,800
Net profit £2856
Total Equity £188,656

Answer no 3:
Break even point and Margin of Safety:

Fixed Costs: 55% of Total Expenses = 55/100 * £1,147,994 = £631,397

Variable Costs: 45% of Total Expenses = 45/100 * £1,147,994 = £516,597

Break even Sales = Fixed Costs / Contribution Margin

Contribution Margin = Sales - Variable Costs

Contribution Margin: £1,150,850 - £516,597 = £634,253

Break even Sales = £631,397 / £634,253 = £0.995 (rounded to 2 decimal places)

Break even point in terms of number of customers required = Break-even Sales /

Average Revenue per Customer
Average Revenue per Customer = Sales / Number of Customers

Average Revenue per Customer: £1,150,850 / 40,000 = £28.77 (rounded to 2 decimal

places)

Break even point in terms of number of customers required = £0.995 / £28.77 ≈

34.56 (rounded to the nearest whole number)

Margin of Safety% = (Actual Sales - Break even Sales) / Actual Sales

Margin of Safety% = (£1,150,850 - £631,397) / £1,150,850 = 45.22% (rounded to 2

decimal places)

Answer no 4:
Three key findings from the financial performance of Media Marketing based on the
statements prepared are:

 Media Marketing's net profit after tax for the year ended 31st August 2022 was
only £11,155, indicating that the business is not performing as well as it could
be. This is also evident from the fact that the attendance for the last financial
year was 40,000 customers, a reduction of over 20% from previous
 years.Decrease in Attendance: Media Marketing reported a reduction of over
20% in attendance for the last financial year compared to previous years, as
stated in the trial balance. This indicates that the company may be facing
challenges in attracting and retaining customers, which could impact their sales
and overall financial performance.
 The break even point for Media Marketing is 34.56 customers, indicating that
the business needs to attract more customers to cover its fixed costs and make a
profit. Low Net Profit: The Net Profit before Tax for the year ended 31st August
2022 is only £2,856, as calculated in the Income Statement. This indicates that
Media Marketing's profitability is relatively low, which could be a cause for
concern and may require further analysis to identify the reasons behind the low
profitability.
 Despite generating sales of £1,150,850, Media Marketing's net profit was only
£2,856 indicating a low profit margin and potential issues with controlling
expenses.Relatively High Expenses: Media Marketing's total expenses for the
year ended 31st August 2022 amount to £1,147,994, as calculated in the Income
Statement. This indicates that the company has significant expenses, including
rent & rates, salaries & wages, and professional charges, which could be
impacting their profitability and financial performance.

Answer no 5:
 Social media advertising: Social media platforms like Facebook, Instagram,
Twitter, and LinkedIn offer highly targeted advertising options that can be
tailored to reach specific demographics, interests, and behaviors. By leveraging
these platforms, media companies can promote their content, reach new
audiences, and generate revenue through sponsored content, partnerships, and
affiliate marketing.Improve Profitability: Media Marketing should analyze their
pricing strategy, sales mix, and cost structure to identify opportunities for
improving profitability. This could involve increasing prices for their services,
upselling or cross-selling additional services to existing customers, and
optimizing their variable costs to improve the contribution margin.

 Content marketing: Creating high-quality content that is useful, relevant, and

engaging is essential for building an audience and generating revenue. Media
companies can leverage content marketing to attract and retain readers,
listeners, and viewers, as well as to promote their products and services. This
can include blog posts, podcasts, videos, and other forms of content that are
optimized for search engines and social media platforms.Review and Reduce
Expenses Media Marketing should conduct a thorough review of their expenses
to identify any areas where costs can be reduced without compromising the
quality of their services. This could involve renegotiating contracts with
suppliers, optimizing staffing levels, and exploring cost-effective alternatives for
services such as insurance and repairs & maintenance
 Programmatic advertising: Programmatic advertising involves using automated
software to buy and sell ad inventory in real-time. This can help media
companies to streamline their ad operations, increase efficiency, and improve
targeting. By leveraging programmatic advertising, media companies can also
reduce costs and generate more revenue by serving ads to the right audience at
the right time. It's important to note that programmatic advertising requires
careful monitoring and optimization to ensure that it is delivering the desired
results.ncrease Customer Acquisition and Retention Efforts Media Marketing
should focus on improving their marketing and customer acquisition strategies
to attract and retain more customers. This could include targeted advertising
campaigns, networking events, and partnerships with local entrepreneurial
communities to increase attendance and generate more sales.Focus on
customer experience Providing a positive customer experience is crucial for any
business looking to improve its financial performance. This involves
understanding your customers' needs and preferences, and tailoring your
products or services to meet those needs.