TheaimofthisresearchistoconcentrateonthesystematizationofCourtsJamaicaLimited.

T
hefocusisontheBusinessAccountingandFinancesModule3.Theobjectivesofthebusinessaretoprovideaffordablefurnitureandappliancesto
theJamaicanpeople,createvaluesfortheirstockholdersbyprovidingqualitygoodsandser
vices,makehugeamountsofprofitandselllargeamountsofshares.Thisresearchwasdonei
nthecontextgraspingthebusinessaspectsofthebusinessenvironment,includingtheoreti
calknowledgeoftheseaspectsfromapracticalstandpointofowningbusiness.Also,thisres
earchgivesmeachancetostartmyexaminationswithtwentypercent(20%)oftheavailable
marks.

\
Thisprojectisdesignedtothoroughlyresearchalegalformofbusiness.Theprojectinvolved
therelevantinformationthatwillgivestudentsthegeneralunderstandingofhowsuchafirm

operates.Thecontentsoftheresearchseekstogiveacomprehensiveroundupofallthearea
softhebusiness,however,specificattentionwasfocusedinthreebroadareasintheoperatio
nfield.ThisprojectcoverstheareasthatareincludedintheunitoneCaribbeanAdvancedPro
ficiencyExamination(CAPE)syllabusforManagementofBusiness.Thisprojectwilllookspe
cificallyonModulethreeofthesyllabuswhichdealswiththecompanyAccountingandFinan
cing.Theareaswhichwillbecoveredare: Thebusinesssourceoffinance Criteriaforseekin
gfinance Useofaccountinginformation Accountingproceduresandmeasures Financial
statementandanalysis MajorconceptsThisprojectalsocontainsachapterthatlooksatthe
businesspublishedaccounts.Theinformationplacedinthissectionwasthoseobtainfromt
hesecondarysourceofdatacollection5

Inordertoaccuratelyobtaintherelevantinformationneededtocompletethisprojectbothp
rimaryandsecondarymethodsofdatacollectionwereused.Theprimarymeanofcollecting

datainvolvedtheuseofquestionnaire.Thequestionnaireconsistedoftwentyquestions,of
openandclosedendedquestions.Thequestionnairewasverysimpletouseandansweredal
lthequestionstheresearcherneededtoeffectivelycompilehisproject,hence,themethode
ffectiveandwidespread.Atotalofthreequestionnaireswereissuedusingarandomsamplin
gapproach.Secondarymeansofdatacollectioninvolvedtheuseoftextbooks,newspapers
andmagazines.Thismethodofdatacollectionalsoplayedanimportantroleintheeffectivec
ompilationofmyproject.Thetextbookusedinthedatacollectionprocess,containedthegen
eralinformationthatcorrespondedwiththeCAPEsyllabus,theseinformationprovidedalin
kagebetweenwhatisbeingthoughtandwhatitisactuallylikeinthebusinessplace.Theinfor
mationthatthenewspapersandmagazinescontainedwasvitalineffectivecompletionofth
eresearch.Thepublishedaccountsofthefirmwerefoundinthesemeansofdatacollection.T
hesetwosourcesusedinthedatacollectionprocessweresufficienttocompletemyresearch
.Theresearcherduringtheresearchfacedfewproblemssuchas:limitedamounttohaveath
oroughresearchonthetopic,duetothefacttheresearchertimehadtobebalancedoutwitho
therinternalassessments.Anotherproblemfacedbytheresearcherwasthathedidnothav
eenoughequipmenttogettheassessmentdoneontime.6

1. An investigation into the Accounting and Financing of Courts Jamaica

Limited.Name : Alex EllisSchool : Oberlin HighTerritory : JamaicaRegistration # :
100086Teacher : Ms ColemanCentre # : 100086Date : April 2011 1
2. Content PageAcknowledgement 3Aims 4Introduction and Objectives
5Methodology Employed 6Report 7 - 12Conclusions and Recommendations
13Bibliography 14Appendices 15 - 20 2

3. This project is the fruit of concerted efforts. A project of this magnitude was
effectively compiled withthe assistance and contribution of a number of individuals;
gratitude must be extended to such persons. The researcher would like to thank
God almighty for giving him the health and strength he need tocomplete this
Management of Business Internal Assessment, so as to meet the requirements of
the CaribbeanAdvanced Proficiency Examination syllabus. The researcher would like
to give credit to his teacher Miss Coleman for the role she played inoutlining the
task I am expected to perform. I would like to express my warmest thanks to my
friends at school who contributed significantly to myproject. Finally, I would like to
say thanks to the staff at the schools computer labs that went beyond the callof
duty to ensure that the necessary resources were available and the attention was
forth coming so that myproject was completed efficiently. 3
4. The aim of this research is to concentrate on the systematization of Courts
Jamaica Limited. The focusis on the Business Accounting and Finances- Module 3.
The objectives of the business are to provideaffordable furniture and appliances to
the Jamaican people, create values for their stockholders by providingquality goods
and services, make huge amounts of profit and sell large amounts of shares. This
research wasdone in the context grasping the business aspects of the business
environment, including theoreticalknowledge of these aspects from a practical
standpoint of owning business. Also, this research gives me achance to start my
examinations with twenty percent (20%) of the available marks. 4
5. This project is designed to thoroughly research a legal form of business. The
project involved therelevant information that will give students the general
understanding of how such a firm operates. Thecontents of the research seeks to
give a comprehensive round up of all the areas of the business, however,specific
attention was focused in three broad areas in the operation field. This project covers
the areas that areincluded in the unit one Caribbean Advanced Proficiency
Examination (CAPE) syllabus for Management ofBusiness. This project will look
specifically on Module three of the syllabus which deals with the
companyAccounting and Financing. The areas which will be covered are: The
business source of finance Criteria for seeking finance Use of accounting
information Accounting procedures and measures Financial statement and
analysis Major concepts This project also contains a chapter that looks at the
business published accounts. The informationplaced in this section was those obtain
from the secondary source of data collection 5
6. In order to accurately obtain the relevant information needed to complete this
project both primary andsecondary methods of data collection were used. The
primary mean of collecting data involved the use ofquestionnaire. The questionnaire
consisted of twenty questions, of open and closed ended questions.
Thequestionnaire was very simple to use and answered all the questions the
researcher needed to effectivelycompile his project, hence, the method effective

and widespread. A total of three questionnaires were issuedusing a random

sampling approach. Secondary means of data collection involved the use of
textbooks, newspapers and magazines. Thismethod of data collection also played
an important role in the effective compilation of my project. Thetextbook used in the
data collection process, contained the general information that corresponded with
theCAPE syllabus, these information provided a linkage between what is being
thought and what it is actuallylike in the business place. The information that the
newspapers and magazines contained was vital in effectivecompletion of the
research. The published accounts of the firm were found in these means of data
collection.These two sources used in the data collection process were sufficient to
complete my research. The researcher during the research faced few problems such
as: limited amount to have athorough research on the topic, due to the fact the
researcher time had to be balanced out with other internalassessments. Another
problem faced by the researcher was that he did not have enough equipment to get
theassessment done on time. 6
7. 7
8. The Courts Jamaica Limited as the name suggested is a public limited company,
that is to say that thebusiness is privately owned by shareholders and its shares are
listed on the Jamaica Stock Exchange and theseshares are freely transferable of the
company are published on a yearly basis in the form of annual reports andare open
to public scrutiny. This means that the business has little privacy in its operation. It
is domiciled inJamaica and also a subsidiary of Courts Furnishers (Overseas) Limited
which is incorporated in England andwhich is seventy nine point nine percent
(79.9%) of the companys issued stock units. An economic system is the framework
design to allocate the scarce resources of a country. Theresources of Jamaica are
allocated through a mixed economic system; in this system there is some private
andsome public ownership of its economic resources. In this type of economic
system, Courts Jamaica Limited isforced to produce a wide range of quality furniture
and appliances at an affordable price to the Jamaicanconsumers, in order to
effectively compete on the local market. In this type of economy the company
alsoforces restrictions and laws, which may affect its operation. Courts Jamaica
Limited and all other businesses are faced with the problem of financing
businessactivities. The company has the need to finance its working capital and its
the day to day finance, needed topay bills and expenses and to build up stocks.
Businesses also need to finance investments such as specialprojects and
expansions. Courts Jamaica Limited finance the needed to increase the firms capital
assets whenthe company undertakes expansion, the company on occasion pay for
research and development of newproducts. In general companies have a variety of
sources which it can finance from; these sources are normallyinternal or external
sources. The internal sources of finance include retained profit (is profit after tax
that hasnot been returned to owners), working capital and sale of asset. External
sources include share capital, loancapital such as mortgage; and debentures also

bank overdraft and trade credit. The diagram below shows thecompany sources of
finances. 8
9. SOURES OF FUND INTERNAL EXTERNALRETAIN SALE OF ASSETPROFIT SHARE
CAPITAL TRADE CREDIT WORKING CAPITAL LOAN CAPITAL Courts finances its
businesses activities through stockholders equity and profits retained. As a limited
company Courts issues shares, the capital raised from this venture is used to
finance business activities. If a company is trading profitability some of these profits
will be taken in by the government as corporate tax and some is nearly always paid
out to shareholders this is known as dividends. If any profits remain; this retained in
the business and become a source of finance for future activities this is known as
capital reserve, which can also be used to redeem shares. The profit retained by
Courts is its first source of finance. Accounting act as system, which process
business data so that stakeholders can be provided with means understanding how
well an organization is performing. As its with Courts accounting information is
particular important to the company financial decision makings. The company
makes choices that are in its best financial interest. In recording accounting
information Courts use Profit and Loss account Statement of Cash flows and
Statement of changes in stockholders equity. When Courts Jamaica Limited is about
to seek finance it has certain criteria for selecting the source of financing these
include; cost, use of funds and its financial situation. The cost criterion deals with
choosing sources which are less expensive both in terms of interest and interest
payments administrative costs. When undertaking heavy capital expenditure the
company normal funds this by the use of long term sources which is normally an
external source. 9
10. The companys accounting information is used by various groups and the
company financial statementshave to be published. The users of the company
financial statements include owners, employees, tax authority,competitors,
management and government. The need for the company financial information by
the differentgroups are different where employees use it when discussing wage
bargains, managers when recording,analyzing and controlling the company
operations, owners for assessing performance, tax authorities to showproof of
income, competitors for analyzing the company stability and performance, and the
government forstatistics on companies. The company when recording its financial
information it has several accounting concepts which it has tofollow in order for the
business to reflect a true and fair view of its financial position. These concepts are
theaccruals concept, consistency concept, separate entity, money terms and
historical cost. The accruals conceptthat costs and revenues should be matched
with the period in which they occur. The consistency concept statesthat when one
decision has been made about the treatment of a transaction it should not be
change. A businessis a legal person in its own right and has a separate identity from
that of the owners is what is outlined by theseparate entity concept. Money terms
indicates that when business transactions are being recorded it should berecorded

in a monetary value while historical cost stipulates that all assets are valued
according to theiroriginal cost rather than what they currently worth. Financial
statements are formal records of the financial activities of a business. A limited
company set offinancial statements includes a balance sheet (a summary at a point
in time of business assets, liabilities andcapital), income statement (shows the a
business income after expenses and tax from operating profit), cashflow statement
(shows a company sources and uses of cash in a trading period) and notes which
explained thefigures in the other financial statements. The financial statements of
the company are structured in a particular manner and must certain keyelements
which they must consist. Each financial statement has its own purpose as stated
above where a briefdescription of their purpose where given. 10
11. The balance of the company should contain the following: the company assets,
its liabilities and thecompany equities. The balance sheet should have the company
name on it the date for which it had beenprepared for and the currency which it
being expressed in. The assets should be listed first then followed bythe liabilities
then equities. The income and cash flow statement should enlist the revenues, the
gains, expenses, profits or losses andthe comprehensive income. They should also
give the company name, the date for which it is prepared for andthe currency which
it is expressed in. Ratio analysis is done by comparing and assessing a company
performance by means of accounting data.The net profit margin as a profitability
ratio assesses how successful the management of a business has been atearning
profits for the business. The ratio compares the business net profits for the
business. The ratiocompares the business net profits for the business net profit with
its sales. Gross Profit Margin (%) = Gross Profit x 2,552,273 x 100 = 55.6% ` Sales
Turnover 4,591,907 Courts Jamaica Limited gross margin is high; this gross profit is
only fifty five point six percent (55.6%)of its sales turnover. This is indicated by
figure 2 in the appendices, where it explains that sales is sixty fourpercent (64%)
and gross profit is thirty six percent (36%) given a ratio of 1.8:1, therefore for every
one dollareighty cents ($1.80) of sales one dollar ($1.00) goes to gross profit. This is
a good sign since it will yield agood net profit margin as indicated by figure 3 where
the sales is eighty four percent (84%) and net profit issixteen percent (16%),
showing that there is a ratio of 5.1:1, therefore the company the company makes
onedollar profit from every five dollar ten cents. The profitability ratio compares the
profit of the business withsales, assets and capital employed. The gross profit
margin is a good indicator of how effectively managershave added value to the cost
of goods sold. Current Ratio (%) = Current Assets x 4,043,643 x 100 = 600.95% `
Current Liabilities 672,873 11
12. Liquidity ratio assesses a business ability to pay its short-term debts. Current
ratio, as a current ratiocompared to current assets with current liabilities. Current
ratio of Courts is 6:1 and the company high currentratio suggests that the company
is able to pay off its creditors six times. This is show in figure 1 in theappendices
where it indicates that of the total current assets and current liabilities, current

assets total eightyfour percent (86%) while current liabilities total fourteen percent
(14%). This is a good ratio because abusiness current asset should be at least two
times its current liabilities and the company ratio is 6:1. 12
13. Courts Jamaica Limited is a public listed company incorporated and resides in
Jamaica. It is asubsidiary of Courts Furnishers (Overseas) Limited which is
incorporated in England and which holds 79.9%of the companys issued stock units.
The ultimate holding company is Courts PLC, which is also incorporatedin England.
The principal activities of Courts Jamaica Limited consist of the retailing and the hire
purchasefinancing of furniture and appliances. When Courts started its operations,
furniture was being imported;however this has changed. The change being referred
to is a switch in 1965 to all locally manufacturedfurniture in the companys effort to
assist in the development of the domestic furniture manufacturingindustry. It could
be concluded that Courts Jamaica Limited has various sources of finance and has
criteria forchoosing the source of funds. It could also be concluded that the
company follow some of the majoraccounting concepts and a lot of different groups
of people uses the company accounting information forvarious reasons. The
researcher would like to recommend that the company continue to using the
accounting conceptsits using now and adopt other principles was well as
conventions. The recommends that Courts JamaicaLimited increase on the
availability of internal sources of fund so has to reduce the cost associated
withborrowing. 13
Hall, D., Jones, R., Raffo, C., Chambers, I., 14. & Gray, D. (2004). Business Studies.
London: Pearson Wood, F., Education. & Sangster, A. (2008). Business Accounting
2. London: Prentice Hall. 14
15. 15
16. Questionnaire1. What form of business does the company operate? ( ) Sole
Trader ( ) Partnership ( ) Limited Company ( ) Corporation ( ) Cooperatives2. What is
the objective of your business?
____________________________________________________________________________________
____________________________________________________________________________________
_____________________________________________________3. What line of business is the
firm engaged in? ______________________________________4. Which management style
is employed? ( ) Directive ( ) Paternalistic ( ) Constitutional ( ) Participative5. Is this
management style effective? ( ) Yes ( ) No b). Explain your response.
____________________________________________________________________________________
________________________________________________________________6. What is the span
of control like in the organization?
__________________________________________________________________________7. How is
information communicated within the company? ( ) Vertical ( ) Horizontal8. Are job
descriptions issued to prospective employees? ( ) Yes ( ) No B) What do they
include?

____________________________________________________________________________________
________________________________________________________________ 16
17. 9. What are the factors of production employed by the business?
____________________________________________________________________________________
________________________________________________________________10. State the scale
of production e.g. 50 sales per day, 1000 products made each week?
__________________________________________________________________________11. Is the
business labour or capital intensive? _______________________________________12. Are
there normally any production/sales problems that this enterprise encounters? ( )
Yes ( ) No B). If so what are they?
____________________________________________________________________________________
________________________________________________________________13. What are the
business sources of capital? ( ) Loans ( ) Shares ( ) Retained Profit ( ) Dividend ( )
Other If other state
___________________________________________________________________14. What kind of
collateral is used by the business to secure loans and what are the terms of
repayment?
____________________________________________________________________________________
________________________________________________________________15. How profitable is
the business and what contributes to this?
____________________________________________________________________________________
________________________________________________________________16. Does the
business provide employment to citizens? ( ) Yes ( ) No17. Do the working conditions
for employees meet the legal guidelines? Explain.
____________________________________________________________________________________
________________________________________________________________ 17
18. 18. Explain the safety procedures followed, if any:
____________________________________________________________________________________
________________________________________________________________19. Are the products
of the business exported? ( ) Yes ( ) No20. How does the business help in the
development of the country?
____________________________________________________________________________________
________________________________________________________________ 18
19. FIGURE 1FIGURE 2 19