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Failed first attempt.
Passed this time round, revise the whole thing again with opentuition.
Thanks.Last question got a loss in the consolidated statement of Profit or Loss… hope that is correct.. haha
Had not come across part B of that question, do not know how to comment of that portion.I got the Cheese company paper.
ROCE were similar but the gross profit and net profit decrease. The coy expanded business in budget market in 20X7, hence selling price decreased but cost of sales no change. The coy has plan to expand further into the budget market, this could eventually eat up their profit from the luxury market. Cost of sale increment is more than revenue in turn of %.
Administrative cost increase mainly due to professional fee. So I think the coy have to keep their staff turnover low in order not to incur further expense.
For expansion, I suggest to use retained earning and issuance of new shares or rights as compare to bank loan. Shareholder should support the move with good plan. Bank loan not recommended as they already have increased loan as compare to 20X6.
Suggestion for the coy: improve their sale on the luxury market as that is where the profit is coming from. Get cheaper but goos quality product from other supplier in order to expand into the budget market segment.