A friend, Wazir, has asked you for advice because he understands very little about accounting statements. His accountant

[answerhappygod]

A friend, Wazir, has asked you for
advice because he understands very little about accounting
statements. His accountant has prepared the following summary of
the last three years results of Wazir’ shoe business:
20X6


20X5


20X4
£


£


£
Revenue
286,860
256,496
260,241
Cost of sales
193,458
172,188
174,841
Gross profit
93,402
84,308
85,400
Expenses:
Premises costs
(23,298)
(16,277)
(16,141)
Staffing costs
(18,265)
(18,203)
(16,279)
Administration cost
(10,761)
(10,240)
(10,186)
Net profit
41
,
078
39
,
588
42
,
794
Wazir tells you that in the early
months of 20X5 a discount shoe operation opened near his shop. His
sales suffered at first because of the competition, but after about
8 months the rival went out of business. Wazir decided, however,
that he had better extend the range of inventory carried and also
increase the floor area of the selling space so as to build up
revenue. Since the end of 20X5 he has rented additional showroom
and storage space from the business next door.
Wazir would like you to explain to him the impact of these
events on his business performance.
Questions: (indicative word
count 280 words)