Bingo Co is a very successful multinational retail company. It has been selling a large range of household and electronic goods for some years. One year ago, it began using new suppliers from the country of Swaziland, where labour is very cheap, for many of its household goods. In 20X4, Bingo Co also became a major provider of 'cloud computing' services, investing heavily in cloud technology. These services provide customers with a way of storing and accessing data and programs over the internet rather than on their computers' hard drives.

All Bingo Co customers have the option to sign up for the company's 'Gold' membership service, which provides next day delivery on all orders, in return for an annual service fee of $40. In September 20X5, Bingo Co formed its own logistics company and took over the delivery of all of its parcels, instead of using the services of international delivery companies.

Over the last year, there has been worldwide growth in the electronic goods market of 20%. Average growth rates and gross profit margins for cloud computing service providers have been 50% and 80% respectively in the last year. Bingo Co's prices have remained stable year on year for all sectors of its business, with price competitiveness being crucial to its continuing success as the leading global electronic retailer.

The following information is available for Bingo Co for the last two financial years:

3. Administration expenses

Included in these costs are the costs of running the customer service department ($860,000 in 20X5; $1,900,000 in 20X6). This department deals with customer complaints.

Discuss the financial and non-financial performance of Bingo Co for the year ending 31 August 20X6. 

Transcribed Image Text:

Notes 31 August 20X6 31 August 20X5 $'000 $'000 Revenue 1 94,660 82,320 Cost of sales (54,531) (51,708) Gross profit 40,129 30,612 Administration expenses 3 (2,760) (1,720) Distribution expenses (13,420) (13,180) Other operating expenses (140) (110) Net profit 23,809 15,602 1. Breakdown of revenue 31 August 20X6 31 August 20X5 $'000 $'000 Household goods 38,990 41,160 Electronic goods 41,870 32,640 Cloud computing services 12,400 6,520 Gold membership fees 1,400 2,000 94,660 82,320 2. Breakdown of cost of 31 August 31 August sales 20X6 20X5 $'000 S'000 Household goods 23,394 28,812 Electronic goods 26,797 21,216 Cloud computing services 4,240 1,580 Gold membership fees 100 100 54,531 51,708 Notes 31 August 20X6 31 August 20X5 $'000 $'000 Revenue 1 94,660 82,320 Cost of sales (54,531) (51,708) Gross profit 40,129 30,612 Administration expenses 3 (2,760) (1,720) Distribution expenses (13,420) (13,180) Other operating expenses (140) (110) Net profit 23,809 15,602 1. Breakdown of revenue 31 August 20X6 31 August 20X5 $'000 $'000 Household goods 38,990 41,160 Electronic goods 41,870 32,640 Cloud computing services 12,400 6,520 Gold membership fees 1,400 2,000 94,660 82,320 2. Breakdown of cost of 31 August 31 August sales 20X6 20X5 $'000 S'000 Household goods 23,394 28,812 Electronic goods 26,797 21,216 Cloud computing services 4,240 1,580 Gold membership fees 100 100 54,531 51,708

Answer rating: 100% (QA)

Financial and nonfinancial performance measurements A financial performance analysis of a company to ... View the full answer