Explore BrainMass

Explore BrainMass

    small company taxes and turn on capital

    Not what you're looking for? Search our solutions OR ask your own Custom question.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    10.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.

    11. Explain the following terms.

    Cost center and Cost units.

    12. In what ways might investment decisions be affected
    By non-financial factors?

    13. State and explain two advantages that Discounted Cash flow
    Has over Payback as a method of Capital investment appraisal.

    14. Define Prudence.

    15. Discuss how the concept of prudence might be relevant when
    Considering
    1. Goodwill
    2. The Valuation of Stock in Trade.

    16. It has been suggested that any department that is making a
    Loss should be closed. Comments on this suggestion.

    17. 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.

    18. State Six shortcomings or dangers in using ration analysis.

    © BrainMass Inc. brainmass.com March 4, 2021, 5:45 pm ad1c9bdddf
    https://brainmass.com/business/accounting/small-company-taxes-turn-capital-9198

    Attachments

    Solution Preview

    10.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.
    Costs grew faster than sales. Examples could be hired more people, moved to a more expensive location, material costs have gone up, etc.

    State three ways in which she may improve her return on Capital.
    Increase sales, decrease cost of goods, decrease fixed costs.

    11. Explain the following terms.

    Cost center and Cost units.
    A Cost Center is a ...

    Solution Summary

    Cost center and Cost units are examined. A small company taxes and turn on capital are determined. The improved return on capital are given.

    $2.49

    ADVERTISEMENT