IB Business Management 3.6 Efficiency Ratio Analysis Questionbank

FreshSteps Foundation

FreshSteps Foundation is a non-profit social enterprise based in Kenya that installs small-scale water filtration systems in rural communities. It operates as a private limited company (Ltd) but reinvests all surplus profits to expand its social impact rather than paying dividends.

Its business objectives include achieving financial sustainability and maintaining a minimum return on capital employed (ROCE) of 5% to fund future installations without relying heavily on grants.

Table 1: Statement of Profit or Loss for FreshSteps Foundation for the year ending 31 December 2024 (figures in $000)

Table 2: Additional Financial Information

SkyGen Ltd.

SkyGen Ltd. is a software company that previously operated using a traditional hierarchical structure with centralized decision-making. After losing several talented developers, the company began restructuring project teams and moving toward a flatter matrix system.

SkyGen has also updated its performance appraisal process and begun introducing self-managed development plans. The HR director is piloting new methods for evaluating staff performance while linking role enrichment to innovation output.

Table 1. Statement of Financial Position: SkyGen Ltd. (as at 31 December 2023) (All figures in $m)

AlpineWare Ltd.

AlpineWare Ltd. is a manufacturer of high-quality outdoor cookware and portable kitchen gear, operating primarily in the European market. After a successful five-year period of growth, the company has seen a decline in staff productivity and an increase in employee turnover. The HR department attributes this to a lack of staff recognition and clarity in day-to-day operations.

To address these issues, AlpineWare appointed a new operations manager with a democratic leadership style, who introduced team-based decision-making and revised performance appraisal systems to enhance employee motivation. The finance director, however, has raised concerns that productivity remains below target and the business may need to raise additional funds for a planned investment in automation.

The finance department has compiled final accounts and key data for 2024 to assess AlpineWare's operational performance and evaluate its financial options.

Table 1: Selected Financial Data – AlpineWare Ltd. (2024)

BrightPath Ltd.

BrightPath Ltd. is a private limited company that provides digital career coaching platforms to secondary schools and universities. The business is at a transitional stage: after rapid early growth, profits have started to plateau. In response, the board has appointed a new CEO with a highly authoritarian leadership style and a focus on efficiency and results.

However, this shift in management approach has clashed with BrightPath's historically person-oriented corporate culture, which emphasised innovation, inclusivity, and autonomy. Employee morale has declined, and recent internal surveys suggest that staff are increasingly demotivated due to perceived lack of recognition and limited input in decision-making.

The finance department has provided the final accounts and key data from 2024, and the company is also considering raising capital to fund an AI-integrated platform upgrade.

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Table 1: Selected Financial Data – BrightPath Ltd. (2024)

ZenMoto Ltd.

ZenMoto Ltd. is a Japanese company that manufactures electric scooters designed for city commuting. To improve operational efficiency, ZenMoto has implemented lean production techniques such as just-in-time (JIT) inventory management, kaizen (continuous improvement), and quality circles across its factories. It is also reviewing its production planning processes to better match seasonal demand fluctuations.

The company plans to expand into new Southeast Asian markets and needs funding for a new manufacturing plant. The finance department has provided key efficiency data and is evaluating whether internal cash flows are sufficient or if external sources of finance are needed.

Table 1: Selected Financial Data – ZenMoto Ltd. (2024)