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To investigate the business activity of Chocoholics plc.

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Introduction

+0 To investigate the business activity of Chocoholics plc. With regard to securing its position as a leading chocolate manufacturer. Chocoholics is a chocolate company making selection boxes using a mass-production line. The factory also makes hand-made luxury chocolates which are very popular with customers. Because of this, production of selection boxes stops every Friday so that the staff usually working on the machinery can concentrate on making the hand-made chocolates. Chocoholics sells its products to wholesale outlets across the UK but it wants to investigate new markets and increase their trade. There are approximately 70 staff employed by Chocoholics and over half of them work in production. The company takes pride over the quality of their products and all their products are delivered to customers by their own vans and drivers. The rival company to chocoholics is 'Sweet Tooth plc.' And they have recently approached Chocoholics board of directors to discuss a merger. Chocoholics do not want this and are now worried that Sweet Tooth may consider making a takeover bid. There are three types of production Primary This is the extraction of raw materials from land and/or sea. Examples of this type of production are: ==> Oil Rig ==> Coal Mining ==> Fishing ==> Quarrying ==> Farming and agriculture ==> Forestry Secondary This is the process of making something from the raw material, turning it into a product. ...read more.

Middle

The profits of the business are shared among the partners according to the amount of the capital each one invested to start up the business. Advantages: ==> It is easy to set up ==> The amount of capital needed to start up the partnership is often small. ==> Forming a partnership can mean it is easier to raise extra capital when needed as all the partners can contribute. ==> With partners, there is someone to share things with and talk things over. Disadvantages: ==> The partners have unlimited liability for the debts of the business, unless they are limited partners. ==> Partners can have disagreements about the running of the business which is why the Deed of Partnership is so important. Disagreements over control of the business, sharing the profits, withdrawal from the partnership or inviting new partners to the business can all be covered in the Deed of Partnership. ==> If a partner dies or becomes bankrupt then the partnership must be dissolved. What is a Private Limited Company? A private limited company is made up of people who know each other, such as family, friends or work associates. They buy shares in the company and become part owners. Shares cannot be brought by the public, only by this small group of people- in other words, the owners can control who buys their shares. That is why this type of business is called a private limited company. ...read more.

Conclusion

Sell more and it will make a profit. To draw a break-even chart you need to know the fixed costs and the variable costs per unit and the selling price. The break-even point is where the lines for total revenue and total costs are equal. Break-even analysis is great in theory but it can have its problems in the real world: ==> It assumes that the firm can sell any quality of the product at the current price. In practice the firm may need to reduce prices to sell at high levels of output. ==> It assumes fixed costs never change- but as output increases the firm may need more machines, bigger offices and so on. ==> Finally it assumes that all products are sold. This doesn't always happen. All companies have to produce an annual report every year, it is required by the Companies Act 1985. These accounts have to contain a trading, profit and loss account, a balance sheet and statements on the position of the business. These accounts have to be audited by an independent accountant to make sure that they are accurate. Many people look at these accounts, the bank uses them to check whether any loans will get repaid. The government checks them to see how much tax a company needs. Any potential investors will always read the annual report so the company have to provide copies of it free of charge to anybody who wants one. The annual report is a financial statement summary drawn up at the end of a years trading to show performance within the company. ...read more.

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