Harry Potter is a theme park and has for many years been a successful business, which has traded profitably. About three years ago the directors decided to capitalise on their success and reduced the expenditure made on new thrill rides, reduced routine maintenance where possible ( deciding instead to repair equipment when it broke down ) and made a commitment to regularly increase admission prices. Once an admission price is paid customers can use any of the facilities and rides for free.

These steps increased profits considerably, enabling good dividends to be paid to the owners and bonuses to the

directors. The last two years of financial results are shown below.

	20X4	20X5
	$	$
Sales	5,250,000	5,320,000
Less expenses:
Wages	2,500,000	2,200,000
Maintenance - routine	80,000	70,000
Repairs	260,000	320,000
Directors' salaries	150,000	160,000
Directors' bonuses	15,000	18,000
Other costs ( including depreciation )	1,200,000	1,180,000
Net profit	1,045,000	1,372,000
Book value of assets at start of year	13,000,000	12,000,000
Dividend paid	500,000	650,000
Number of visitors	150,000	140,000

Harry potter operates in a country where the average rate of inflation is around 1% per annum.

Required:

a. Assess the financial performance of Harry Potter using the information given above.( 10 marks )

Note: Computation without explanation will be awarded with 0.25 mark.