Banterbury Company Ltd

The chairman of the company boasts that sales, profits and dividends are at record levels and that the amount of shareholders’
funds in the business has increased to £109,000 at the end of year 4.
Critically assess the performance of the company.

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Income statement of the Banterbury Company Ltd for the year ended 31 December Year 3 Year 4 000 000 Revenue 100 120 Cost of sales (60) (73) Gross profit 40 47 Distribution costs (12) (14) Administration expenses (12) Operating profit 6 21 Finance expenses (3) Profit before taxation Taxation Profit for the year 16 18 (4) (3) 15 Statement of changes in equity of Banterbury Company Ltd for the year ended 31 December Balance at beginning of year Profit for the year Dividends paid Balance at end of year 000 000 93 100 12 15 (5) (6) 100 109