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August 31, 2021 at 11:25 am #633642xyzc
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accountancy teaching co (december 2010)
The turnover of the business has decreased by 8.33% which is a bad sign. It could be due to to the accountancy tuition market facing a 20% decline in demand for accountancy training. While the market size has decreased by 20%, the turnover of the business has only decreased by 8.33% which suggests that the business has actually performed well.
Cost of sales:
The cost of sales has decreased by 19.24% which is good. This could be due to the reduction in freelance lectureres cost. The freelance lecturers cost decreased by 70.25% which is well above the 10% reduction which management asked.
The gross profit margin was 27.69% in 2009 whereas it was 36.31% in 2010. So the gross profit magin has increased by 31.13% which is a positive signal. Course prices were not reduced. So the gross profit margin could have increased due to a reduction in cost of sales particularly the reduction in freelance lecturer costs.
The indirect expenses increased by 34.05% which is bad given that the number of student commplaints decreased by 73.33% and the number of late enrolments due to staff error also decreased by 64.31%. The increase seems to be due to the developments introduced such as the interactive website and the student helpline. It is also due to the introduction of a new training programme for staff which has increased staff training costs by a huge 163.87%.
Net operating profit:
The net operating profit margin was 5.04% in 2009 whereas it was 3.2% in 2010. So it has decreased by 36.51% which is disappointing given that the percentage of students transferring to Accounting Teaching Co from another training provider increased by 150% and the percentage of students passing exams first time increased by 37.5%. The fall in operating profit margin seems to be due to increased indicrect expenses because of developments introduced.
I was only able to write this much within 36 minutes. Is this answer enough. Is this answer enough for a pass mark. How much worth of marks does this answer seemAugust 31, 2021 at 5:54 pm #633675John MoffatKeymaster
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I am not going to give you an exact mark – we do not have the resources to provide a marking service. However it would definitely get you a good mark (and certainly more than the pass mark 🙂 )
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