The following information relates to Preston Financial Services, anaccounting practice. The business specialises in providing accountingand taxation work for dentists and doctors. In the main the clients arewealthy, self-employed and have an average age of 52.

The business was founded by and is wholly owned by Richard Preston,a dominant and aggressive sole practitioner. He feels that promotion ofnew products to his clients would be likely to upset the conservativenature of his dentists and doctors and, as a result, the business hasbeen managed with similar products year on year.

You have been provided with financial information relating to thepractice in appendix 1. In appendix 2, you have been provided withnon-financial information which is based on the balanced scorecardformat.

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Appendix 1: Financial information Current Previous year year Turnover ($000) Net profit ($000) 945 900 187 180 Average cash balances ($000) 21 20 Average trade receivables days (industry 18 days 22 days average 30 days) Inflation rate (%) 3 3 Appendix 2: Balanced scorecard (extract) Current year Previous year Internal business processes Error rates in jobs done 16% Average job completion time 7 weeks 10% 10 weeks Customer knowledge Number of customers 1,220 1,500 Average fee levels ($) 775 600 Market share 14% 20% Learning and growth Percentage of revenue from non-core work 4% 5% Industry average of the proportion of revenue from non-core 30% 25% work in accounting practices Employee retention rate 60% 80% Appendix 1: Financial information Current Previous year year Turnover ($000) Net profit ($000) 945 900 187 180 Average cash balances ($000) 21 20 Average trade receivables days (industry 18 days 22 days average 30 days) Inflation rate (%) 3 3 Appendix 2: Balanced scorecard (extract) Current year Previous year Internal business processes Error rates in jobs done 16% Average job completion time 7 weeks 10% 10 weeks Customer knowledge Number of customers 1,220 1,500 Average fee levels ($) 775 600 Market share 14% 20% Learning and growth Percentage of revenue from non-core work 4% 5% Industry average of the proportion of revenue from non-core 30% 25% work in accounting practices Employee retention rate 60% 80%

Answer rating: 100% (QA)

Answer Based on the provided information here is an analysis of Preston Financial Services 1 Financial Information Turnover The current years turnover ... View the full answer