Question:
Using the following financial information:
(a) Evaluate the finances of this organisation highlighting the strengths and weaknesses of their position.
(b) Provide a justified recommendation as to whether you would consider this organisation for a sourcing exercise for Facilities Management Services emphasising any limit that should be placed on the financial exposure (maximum contract value).
Financial Profit and Loss Statement
|
|
12 month period ended 31 March
2014 £ or $ (delete) '000
|
12 month period ended 31 March
2013 £ or $ (delete) '000
|
|
Turnover
|
161,438
|
138,276
|
|
Cost of sales
|
(124,677)
|
(112,654)
|
|
Gross Profit
|
36,761
|
25,622
|
|
Other operating expenses
|
(32,561)
|
(26,984)
|
|
Operating profit
|
4,200
|
(1,362)
|
|
Interest receivable
|
17
|
18
|
|
Profit/ (loss) before taxation
|
4,217
|
(1,344)
|
|
Tax on profit/ (loss) on ordinary activities
|
(1,545)
|
(8)
|
|
Profit/ (loss) for the financial year
|
2,672
|
(1,352)
|
Balance Sheet at 31 March 2014
|
|
Notes
|
12 month period ended 31 March 2014 £ or $ (delete) '000
|
12 month period ended 31 March 2013 £ or $ (delete) '000
|
|
Fixed Assets
|
|
|
|
|
Intangible assets
|
|
1,202
|
1,352
|
|
Tangible Assets
|
1
|
1,726
|
1,786
|
|
|
|
2,928
|
3,138
|
|
Current Assets
|
|
|
|
|
Stocks
|
2
|
726
|
1,446
|
|
Debtors
|
|
35,975
|
30,457
|
|
Cash
|
|
12,253
|
5,483
|
|
Total Assets
|
|
51,882,
|
40,524
|
|
Creditors, amounts falling within one year
|
|
(43,524)
|
(33,842)
|
|
Creditors, amounts falling due after more than one year
|
3
|
(73)
|
(111)
|
|
Provisions for liabilities
|
4
|
(4,079)
|
(2,340)
|
|
Net assets
|
|
4,206
|
4,231
|
|
Capital and Reserves
|
|
|
|
|
Share capital
|
|
1,135
|
1,135
|
|
Profit and loss account
|
|
3,071
|
3,096
|
|
Total shareholders' funds
|
|
4,206
|
4,231
|
Notes to the Accounts
(1) Tangible fixed assets consists of plant and machinery, computer equipment and other equipment
|
Capital and Reserves
|
|
|
|
|
Share capital
|
|
1,135
|
1,135
|
|
Profit and loss account
|
|
3,071
|
3,096
|
|
Total shareholders' funds
|
|
4,206
|
4,231
|
(3) Creditors due after more than one year consists of hire purchase agreements for equipments
(4) Provisions for liabilities consists of tax liabilities, pension liabilities and the liability for the lease of properties
Guidance
The answer to this task should consist of approximately 3,000 words and should be supported by a title, your candidate number, contents page, executive summary, references and a bibliography. Any source materials such as web sites, reports, articles, market data, journals or texts should be referred to in your work.
This assessment helps you achieve the following capabilities:
- Evaluate the use and choice of pre-qualification criteria or processes for supplier appraisal in the sourcing process taking into account stakeholder requirements
- Research information on suppliers using appropriate sources of information to select appropriate suppliers
- Evaluate the financial, commercial and technical capabilities of potential suppliers and make recommendations on their selection
- Analyse key ratios that indicate profitability, liquidity, gearing and investment in order to evaluate the suitability of potential suppliers