NPZ runs a pizza restaurant and employs 35 part-time staff. Trent, the owner, wants to look at different ways of improving motivation because he believes that having employees with high motivation is important. He is examining NPZ’s financial statements, and an extract is given in Table 2.1. Trent is also thinking about ways to raise NPZ’s profit.
(a)[2]
Define what is meant by ‘current liabilities’.
(b)[2]
Calculate NPZ’s return on capital employed (ROCE). Show how you worked it out.
(c)[4]
Outline two possible benefits that NPZ might gain from well-motivated employees.
(d)[6]
Explain two methods NPZ could adopt to raise employee motivation.
(e)[6]
Do you think reducing variable costs is the best approach for a business to improve profit? 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: “Debts a business owes that will be repaid in under one year” …