IBH is a private limited company owned by one family. It produces a range of children’s shoes using batch production. The market is highly competitive. As with many businesses, IBH needs finance for several purposes. The Finance Director has been examining some financial information. An extract is shown in Table 1. Some directors want to move into the women’s shoe market and would like to know whether IBH’s performance is improving.
(a)[2]
What does the term ‘non-current liabilities’ mean?
(b)[2]
Identify two reasons a business may need finance.
(c)[4]
Identify and explain two possible advantages for IBH of operating as a private limited company.
(d)[6]
Identify and explain two benefits to IBH of using batch production.
(e)[6]
Do you think IBH’s performance improved in 2017? Justify your response using profit margins.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Loans or debts due after more than 12 months” …