PJA manufactures fashion clothing for 16-25 year olds. A lot of its rivals are multinational companies. Every 3 weeks PJA launches new products. Because of import quotas, all of PJA’s products are produced in a local factory. The Managing Director is examining PJA’s financial statements by using ratio analysis. An extract appears in Table 2.1.
(a)[2]
Define the term ‘import quota’.
(b)[2]
Calculate PJA’s gross profit margin. Show how you worked it out.
(c)[4]
Outline one benefit and one limitation for PJA of developing new products.
(d)[6]
Explain two ways PJA’s managers may use ratio analysis.
(e)[6]
In your opinion, do multinational companies always help the countries where they operate? 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: “Cap on the quantity of goods that may enter a country” …