Unit 4: Accounts information

Click on the links below to access notes on the accounting information you will require for unit 4.

Profit and loss account

Balance sheets

Liquidity Ratios

Profitabilty Ratios

Gearing Ratio

Efficiency Ratios

Shareholder Ratios

The Politics bit of PEST analysis

When most students try to think in a PEST framework, they are usually pretty confident when it comes to the bit on social and technological trends. Economics is a bit more tricky (to begin with) but the really hard part seems to be politics. It shouldn’t be really – politics is going on all around us, often in the form of changes to the legal and regulatory environment. Sometimes it’s on an even bigger scale than that, especially on an international level.

Click here the Economist reports how business in Egypt has been rocked by turmoil in recent weeks which extends way beyond the tourism industry. Western companies that cultivated many of the links they had there have wasted their time and money. Multinational companies especially have long known that regional and national political differences and issues have a great importance.

Any unrest in the Middle East is likely to impact on oil prices – and from there, the impact on petrol prices are felt by all firms and households. Economic growth and the best market opportunities are not always to be had in the most politically stable places. BP who have bounced from the politics of Washington (after their Gulf of Mexico oil spill) are now bogged down in difficult negotiations with the politically fragile Russian government regarding exploration in the arctic.

Doing business in China is always a sensitive area for negotiation. In fact, operating in any emerging market involves huge risks and gambles regarding the political climate – and not just abroad. Many western governments are tightening up how their firms must behave when dealing in highly corrupt business environments, for instance when paying bribes to secure contracts is commonplace. Executives who adopt what they regard as “local” rules in Thailand or Indonesia can find themselves facing prison sentences back home.

How do companies cope? There are no simple rules. Countries that are lumped together as emerging markets have very different political regimes. Local politics add yet more complexity. Perhaps firms need to look more carefully at the whole issue and to be less impressed by the appearance of stability. The rapid collapse of Egypt’s government should be food for thought for companies that have bet big on China (with its appearance of order) rather than India (with its messy democracy).

IGCSE Business: ICT in Business

The number of self-service checkouts in supermarkets could double in the next year, despite concerns from customers and unions alike.


The machines are supposed to speed up the process, but a survey suggests almost half of consumers have been delayed while using them.

Click here to access a bbc video clip showing the issues they may face.

Harry's College Homework: The Use of ICT in Business

7 Billion people in the World. Are you Typical?

Unit 4: McDonalds and CSR

Here are some suggested links to video resources which help us strike a balance when using McDonalds as part of teaching corporate social responsibility.


The first video below is a five minute official review of McDonalds’ CSR activities and programmes. As Ian points out, the video is clearly one-sided, but could spark some debate as to the extent to which students feel the reality matches up to the standards portrayed. Loads of stimulus for community engagement, working with suppliers, reacting to NGO campaigns and changing consumer tastes/expectations. Failing that, just admire the embroidered animals on the blouse of the Animal Welfare Professor!


The second clip is the one which is likely to provoke quite a lively response and hopefully some useful discussion.

Unit 3: Tesco’s strategy in the US

The world’s third biggest retailer, Tesco, has been open for business in the United States since 2007, trading under the brand name ‘Fresh and Easy’.

Tesco’s entrance into the US market was a long time coming, with the company studying US shopping habits for 20 years. The team even sent out researchers to live with 60 American families for two weeks to discover the products they bought and they food they ate.

Tesco is showing faith in the (currently) loss-making chain by announcing a store opening spree in northern California.

Priding itself on offering gourmet-style produce, Fresh and Easy launched before the credit crunch, branding itself around the trendy theme of ‘environmental awareness’ - the stores are painted green and there is parking for hybrid cars along with bike racks. Its new distribution centre in Riverside in California - where it makes its salads and ready meals - has one of the largest solar-panelled roofs in the US.

Britons abroad hoping to stock up on Branston Pickle and Marmite will be disappointed - the stores are designed for American consumers. Tesco thinks it has got it right sales formula: the stores aim to cater for time-starved shoppers who want fresh, healthy food - including ready meals - at “affordable prices”. The company is promising to locate some of its outlets in areas that desperately need them. Many low-income, high-poverty areas have become so-called “food deserts”: areas that lack access to fresh, healthy, affordable food.

The idea of restricting choice is also a very interesting innovation. (Try this exercise for yourself. The next time you see the word ‘choice’, replace it with ‘decision’ and see if it’s so great). Fresh & Easy have modelled their west coast outlets on the 800 Tesco Express stores in Britain. Each outlet employs between 20 and 30 people and are much smaller than the typical US supermarket. This will help minimise competition with giant US retailers like Wal-Mart (Asda in Britain).

Tesco has made a sizable investment into the strategy. The plan was to spend around £800m between 2007 and 2010 before achieving breakeven. It hasn’t quite got there yet. According to The Guardian the failure to crack the US market is the one ‘blot on the copybook’ of former chief executive Sir Terry Leahy (see the ‘Tesco Question’ - the boss steps down).

The business is now not predicted to break even until the financial year 2012/13 and the number of store openings still lags well behind the target set when it entered the market in 2007. Last year it announced plans to mothball 13 stores in Nevada and Arizona because of the severity of the sub-prime property crash. The chain made a loss of £95m on sales of £247m in the six months to 28 August 2010. But maybe the tide is turning. According to the head of US operations: “We opened our first stores in 2007 with the goal of creating a modern, 21st-century grocery store. Fast forward to today, and we have 166 stores and more than 4,500 employees”. He added that the extra store openings would bring “welcome volume” to the factories and help to reduce the start-up’s heavy overheads.

But ambitions have scaled back, a bit. The outgoing Tesco boss hinted at the possibility that the chain could end up being “hundreds” rather than “thousands” of Fresh & Easy stores. It may be a while before the size of the US operation reaches the scale it has achieved in the UK.

See more on diversity - a tough issue for international business.

Unit 4: Decision Trees Powerpoint

Decision Trees Powerpoint

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