Chic Paints

Introduction to business (Section 4)
Which accounting function will you be reviewing?
Overview of the business (PC 1.3)
What does the business do? How big is the business – staff, offices, turnover?

CPL sells specialist paints used for boats, cars and industrial machinery.
The company now turns over £120 million with a gross profit margin of 30%.
There are 5 Directors along with 350 employees.

Who are the businesses major stakeholders (internal and external) and why?
You need to identify the internal and external stakeholders of the company
Shareholders, employees, Ashstead Plc, Customers, Suppliers, banks

Accounts Department (PC 1.1, 1.4)
How big is the Accounts department?   What is the purpose of the accounting function? What type of organisational structure is there? Where does the accounts department get its information from? How does the accounts department inter-relate with other departments within the business?  
The accounts department contains six staff plus a chief accountant and a finance director.
The purpose of the accounting function is to collect, store and process accounts data to be used by the stakeholders.
The accounts department use excel to record data on spread sheets rather than use an accounting software.
Excel is also used as an inventory control system.
At the end of the month the accounts department use the spread sheets to update to general, creditors and debtors.

Describe (in relation to the organisation) the 3 main financial statements – Statement of Profit or Loss, SOFP and Statement of Cashflow. (PC 1.2)
What do they show? Who uses them?   What decisions are made based on them?

Statement of Profit or Loss
This financial statement summarises the revenues, costs and expenses incurred during a specific period of time; usually a year or quarter. Income statements can be used to show profitability of a company and are used by stakeholders, company accountants, FD’s an MD’s.