You are an employee of a medium-sized, light engineering company. Your managing director, Sara Potter, asks you to analyse the accounts of your company, Turn-a-Screw Ltd, with a competitor, Fix-it-Quick.

Profit and Loss Accounts Year Ended 31 December 2001 Turn-a-Screw Fix-it-Quick

£000 £000 Sales 2,500 2,800 Cost of Sales (1,000) (1,200)

Gross Profit 1,500 1,600 Administrative expenses (includes loan interest) (900) (1,170)

Distribution expenses (250) (200)

Profit before Taxation 350 230 Taxation (76) (46)

Profit after Taxation 274 184 Preference dividends (30) (20)

Ordinary dividends (124) (94)

Retained Profit 120 70