Questions 4.1 - 4.2

4.1 (5%)
Calculate index figures to shed light on the development in Danish Wood A/S’s environmental impact from 2021 to 2023.

The information you need can be found in Appendix 7 of the Excel file.

4.2 (10%)
Analyse the development in Danish Wood A/S’s environmental impact from 2021 to 2023.

The information you need can be found in Appendix 7 of the Excel file.

Assignment 4

CSR analysis

Danish Wood A/S is a Danish furniture company that has been producing wooden furniture for the Nordic market for many years. The company is known for supplying quality furniture to the middle classes, and has positioned itself as ‘the safe choice for stylish classic furniture’.

In recent years, however, Danish Wood A/S has been financially challenged by stagnating revenue and sharply increasing costs. As a result, the company has posted a loss for the first time in many years.

Danish Wood A/S has always focused on sustainable production. Therefore, the company is increasingly using FSC-certified wood. The certification is a global labelling scheme that aims to safeguard the environment and the people who work in and depend on forestry. FSC-certified wood guarantees that no more wood is felled than a forest can reproduce, and that forest workers have access to training, safety equipment and proper pay. Unfortunately, the company often finds that the FSC-certified wood is of a poorer quality and therefore results in more production waste.

Another focus point for the company has been to reduce its consumption of plastic packaging for wrapping wooden furniture and replace it with more sustainable cardboard packaging. The company has therefore acquired a new packaging machine, which, however, consumes considerably more energy than the old one.

The company’s environmental data can be found in Appendix 7 of the Excel file. The total production of wooden furniture is stated in tonnes.

Questions 3.1 - 3.3

3.1 (5%)
Prepare an income statement classified by function of expenditure for Give Beslag A/S for the 2023 financial year. It is not necessary to prepare notes.

The trial balance (balance totals) can be found in Appendix 4 of the Excel file.
You will find a template which can be used for the income statement (profit and loss account) in Appendix 5 of the Excel file.

3.2 (5%)
Prepare the balance sheet for Give Beslag A/S as at 31 December 2023. It is not necessary to prepare notes.

The trial balance (balance totals) can be found in Appendix 4 of the Excel file.
A template for the balance sheet can be found in Appendix 6 of the Excel file.

3.3 (5%)
Assess how the large increase in inventories has affected the company’s return on investment.

Assignment 3

Reporting and financial analysis

Give Beslag A/S is a Danish subsupplier to the furniture industry. The company specialises in producing many of the metal parts that are used in furniture production such as table legs, handles, hinges and brackets. Over the past five years, Give Beslag A/S has posted growth of approx. 15% a year, and employee numbers have almost doubled over the period.

The company’s chief financial officer (CFO) William Rasmussen has printed the trial balance as of 31 December 2023, which will be used to prepare the income statement (profit and loss account) and balance sheet for the 2023 financial year. The trial balance (balance totals) can be found in Appendix 4 of the Excel file.

Despite a sharp increase in revenue and earnings in 2023, the return on investment has been decreasing, and this is something that surprises the CFO. However, he has noted that inventories have grown sharply in recent years.

Questions 2.1 - 2.4

2.1 (5%)
Calculate the variable unit cost of the Comfort leather sofa.

The information you need can be found in Appendix 3 of the Excel file.

2.2 (5%)
Calculate the contribution margin for a Comfort leather sofa and the contribution margin for the entire consignment of 100 sofas.

2.3 (5%)
Estimate how many of the Comfort leather sofas need to be sold in order to cover the cost of the influencer of DKK 100,000.

2.4 (5%)
Explain whether the cost of the influencer of DKK 100,000 is a variable cost or a capacity cost.

Assignment 2

Calculation and costs

Claus Rasmussen works as a procurement manager for a Danish furniture import company, Scandinavian Furniture A/S, which imports exclusive furniture from southern Europe for sale in Denmark. On a recent business trip to Italy, the procurement manager visited a number of furniture manufacturers, including Milano Design, which offers an exclusive line of leather sofas. Sofas have not previously been part of the Scandinavian Furniture A/S product range, but Claus Rasmussen is convinced that many of the company’s existing customers will be interested in the exclusive sofas from Milano Design.

Claus Rasmussen is considering buying a consignment of 100 leather sofas of the Comfort type at a purchase price of EUR 3,000 per sofa. The exchange rate for EUR 100 is DKK 746. No customs tariffs are payable due to the EU trade agreements. The insurance premium is 2% of the purchase price. The shipping cost per sofa is DKK 500, while forwarding costs for the entire consignment are DKK 2,800.

At a management meeting, concerns were expressed about whether it will be possible to sell the Comfort sofa because sofas are a completely new product in the company’s range. Therefore, it was decided to give the salespeople a sales commission of 4% of the selling price.

The budgeted selling price for the Comfort sofa is DKK 34,500. To market the new sofas, Scandinavian Furniture A/S plans to use an influencer, which will cost DKK 100,000.

Questions 1.1 - 1.6

1.1 (10%)
Based on the accompanying material, explain which factors have had an impact on Bolia International A/S’s financial development from 2019/20 to 2021/22..

1.2 (15%)
Analyse the development in the index figures for earnings and asset use efficiency (capital adjustment) from 2019/20 to 2021/22 based on these factors. See question 1.1.

The key figures can be found in Appendix 1 of the Excel file.

1.3 (10%)
Assess how the development in the index figures affected the profit margin ratio and the asset turnover ratio from 2019/20 to 2021/22.

The key figures can be found in Appendix 1 of the Excel file.

1.4 (5%)
Assess whether the increase in gearing from 1.62 times in 2020/21 to 2.37 times in 2021/22 benefits the owners of Bolia International A/S.

1.5 (5%)
Explain why equity fell from DKK 188.89 million in 2020/21 to DKK 159.695 million i 2021/22.

The statement of changes in equity can be found in Appendix 2 of the Excel file.

1.6 (5%)
Assess which competition strategy is being used by Bolia International A/S.

Assignment 1

Company analysis

Bolia International A/S (Bolia) is a Danish furniture company that designs, produces and markets a wide range of furniture and home accessories. The products are characterised by their aesthetics, quality and sustainability with a focus on Scandinavian design and functionality. Sales take place through 80 concept shops in Denmark and nine other European countries. Sales also take place through the company’s own online shops in more than 30 European markets. The products are also sold through external retailers to private consumers and professional customers, e.g. hotels. The majority of sales are in the European, North American and Asian markets.

Bolia was founded in Aarhus in 2000 as a trading company. The business model was innovative, as Bolia’s entire range was available online, enabling customers to choose products from a wide range of European furniture manufacturers.

Bolia was acquired by the JYSK group in 2001. In 2005, Bolia launched a new strategy that transformed the business model, so that Bolia now designs and produces all its products with a focus on Scandinavian design. All the company’s furniture designs can be customised to meet the wishes of the individual customer, while home accessories are standardised items.

Bolia’s values are based on Scandinavian traditions and the Scandinavian lifestyle, and are:

• Honesty
• Trust
• Respect
• Equality
• Diversity

Bolia works with social responsibility and especially sustainability. Efforts are being made, for example, to reduce the company’s climate footprint by using certified materials for manufacturing the products, by reducing waste in production and by trying to extend the longevity of the products. The longer service life is evident from the fact that Bolia offers a 10-year warranty on its products.

In the video below, Bolia describes its work on sustainability.

In 2021/22, Bolia International A/S had 415 employees. The company posted total revenue of DKK 1,315 million, and a profit before tax of DKK 43.7 million.

This assignment comes with the following material:

Articles:

• Cranking up expansion: Design chain Bolia posts record earnings, Finans.dk, 10 November 2021
• Lars Larsen Group’s design chain expands in spite of crisis, Børsen, 18 November 2022

Key figures:

• Prepared accounting and key figures for Bolia International A/S for the years 2019/20 to 2021/22. See Appendix 1 of the Excel file.

Instructions

This material consists of four assignments. Each assignment has a number of questions which have all been given an approximate weighting. The weightings are used in the overall exam assessment.

All the assignments must be completed independently of each other. The assignments come with an accompanying Excel file, which has a number of appendices containing data and templates. In addition, there is a Word document containing all the questions.

Download:

The Word document with all the questions can be downloaded here: Word file

The Excel document with all the appendices can be downloaded here: Excel file

Remember:

Save the files to your computer before you start to use them.

Communication with anyone else during the exam is not permitted.