Paul serves as the Managing Director of a private limited company named PShirts. It produces and sells shirts for men and women in country Y. Its items are priced below those of most competitors. Sales have dropped recently despite an economic boom. Paul is considering selling shirts in other countries. One director is concerned about legal controls in other countries. A summary of the accounts appears in Table 1.
(a)[2]
Identify two characteristics of an economic boom.
(b)[2]
Calculate the current ratio for 2017.
(c)[4]
Identify and explain two disadvantages to PShirts of being a private limited company.
(d)[6]
Identify and explain two benefits to PShirts of selling in other countries.
(e)[6]
Do you think Paul should be concerned about the shift in profit margins between 2016 and 2017? Justify your answer.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Rapid or fast increase in GDP” …