Question 8
The following information were extracted from the accounts of Mima Stores as at 31st December 2017
(a) Calculate the:
(i) net profit;.
(ii) rate of turnover;
(iii) total assets.
(b) List five factors that affects the rate of turnover of a business.
Observation
Candidates avoided this question may be because it is a calculation question.
The expected responses to the question include:
(a) (i) Calculation of Net profit
(b) Factors that affect the rate of turnover
i. The goodwill/reputation of the business.
ii. The types and varieties of goods the business is dealing in.
iii. The demand for the goods being sold.
iv. The prices of the goods.
v. The level of advertising and publicity made
vi. The level of competition with rival businesses.
vii. The location of the business, whether close or far away from customers.
viii. The availability of credit facilities and ancillary services such as e - payment and e - banking facilities.
ix. The availability of the goods.