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Anyone doing OCR business A2 F297 If so how are you revising for the case study SHL? Really finding it difficult analysing the balance sheets and profit and loss accounts.


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jakecre8
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I wrote about this in another thread, I will try to extract the information and let you know!
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Ok thanks


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jakecre8
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I will just put in all the information I posted another time:
here is some of that info i mentioned:

One point that I think is of importance is that SHL are becoming more highly geared. As you can see, a rise of £926000 in their long term creditors. However, this may be a loan along with their retained profit in order to fund an investment into new tangible assets which have risen by £2.5m.
It is also useful to note that their cost of marketing, distribution and product development has risen by £2.7m. As a result, it could be said that this may be a contributing factor to their increase in profit.
Another point is that in 2012, SHL's cost of sales were 44.4% of their total revenue but in 2013 their cost of sales was also 44.4%. This means that SHL did not take any actions in order to become more efficient. Their net profit increased by 39.8% but their were no reduction in costs.
Dividends increased dramatically by 140% and as a result, ROCE was increased to a large extent too. For example, Ian bought £50000 worth of shares (200000) and in 2012, he had a dividend of £275,000. But in 2013, he had a dividend of £660,526.

Firstly, in appendix 2:

This gives us population data. You can see that SHL's target market is in decline. However, this is only a small changeand the data will also include males, and thus the change is less significant than once thought. SHL can use this data topredict how a change in their target market will affect them- will mainly affect their sales. From appendix 2, you can see that Britain has a clear ageing population and therefore, SHL may change their product portfolio in order cater for what may become a new target market. This could help them to achieve their sales objective and also, with an ageing population, they are likely to use the internet for shopping. As a result, if SHL can stock the right products, then they could more easily reach their objective of getting Harvey Direct to 40% of sales by 2016.

From their profit and loss account:
Net profit increased essentially down to the increase within their revenue figures which rose by 39.8% from 2013 to 2013. There was no reduction in cost of sales, both years it was 44.4%. We are given 0 information about market share and therefore, the increase in revenue could be down to the increase in marketing activities (seen in accounts). The rise in profits lead to much larger dividends (140%) for the shareholders.Initial investment from the shareholders was a very good one considering their returns:
Ian- 43.9% shares- ROCE* 2012=£275000, ROCE 2013= £660526
Tim- 39.5% shares- ROCE 2012= £247500, ROCE 2013= £594474
etc.. *
ROCE= return on capital employed. eg IAN paid £50000 for his shares.
SHL's creditors due after a year rose by £926000 (54%)- may have been used to fund £2.5m investment in tangible assets.
SHL are becoming more highly geared(using more loans to make revenue). Less dividends to shareholders since they will be paying back more loans. This means that they will be more vulnerable to a rise in interest rates.

Table 1:
Shows the production time. Note that the delivery time is very long(link this to how they offshore their production) how will this affect their competitiveness? Will they be able to react to the market which is in 'constant flux'? <- Think about it, a question could come up asking should they re-shore or keep off-shoring production!

Figure 4:
You can clearly see that their products are elastic! If they were inelastic, demand would be the same even at their high prices, however, more are sold during the reduced prices..nuff said!


thought i'd pop some other shizz up in here incase it help you out

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jakecre8
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my school has them. however, I do not
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jakecre8
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sorry, I meant that the theory we learn in class is based around SHL therefore, the revision guide is not good! I understand that my previous statement could be interpreted in two ways!!

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