1. Using relevant ratios in support of your answer, analyse the financial efficiency of Shropshire Hills Water plc over the past two years. (10 marks)

2. Relevant ratios should include:
• Asset turnover
• Inventory or stock turnover
• Payables or creditor days
• Receivables or debtor days.

3. http://web. aqa. org. uk/qual/gce/business/business_materials. php

4. Coffee Delight: Analyse whether or not the Finance Director is correct to say that both expansion projects meet the company’s financial objective of a 10% annual average return, but that the Romanian project looked more attractive? You should support your answer with relevant calculations. (10 marks)

5. Answer:
Romania: Total profits (millions) = ( ) – 10.6 = – 10.6
7.44/4 = 1.86/10.6 x 100 = 17.55%
UK: Total profits (millions) = ( ) – 8.1 = – 8.1
3.67/4 = 0.94/8.1 x 100 = 11.60%