Jenson Travel (JT) provides a broad selection of holidays designed for the mass market. It offers these holidays through its 350 shops in country F. JT has agreed to acquire another company that focuses on activity holidays, including skiing. This takeover will give JT 50 more shops and raise its market share to 40%. The takeover may cut JT’s costs by $35m per year. Table 1 shows a summary of JT’s accounting information for 2016. The Finance Director believes shareholders and customers will gain from the takeover.
(a)[2]
What does ‘non-current assets’ mean?
(b)[2]
Calculate the current ratio from the figures in Table 1.
(c)[4]
Identify and explain two ways shareholders might use JT’s accounts.
(d)[6]
Identify and explain two ways in which the takeover might help JT reduce costs.
(e)[6]
Do you think that customers will benefit from the takeover? 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: “Assets a business owns for longer than one year.” …