Suncity Limited common size ratio for the 2014 income statement.

• A reduction in profit after tax to 11% in 2014 from 15% in 2013
• Operating expenses remained the same in 2014 at 7%

comments on the ratios. Any four (4) correct commentary – Horizontal analysis – changes between 2013 and 2014, or vertical analysis

• Profitability – the operations of the company should be profitable to enable it pay adequate returns to its investors and retain some for reinvestment;
• Market share – the company should grow and maintain its market share to enable it continue to have demand for its products and thereby generate adequate revenue from its sales;
• Growth – growth is one of the key expectations of every organisation, expanding in its operations scope of coverage and investment size;
• Cash flow – have adequate cash flow to meet its operational cost, service loans and other debts as and when they fall due;
• Customer satisfaction – have to be competitive by meeting the expectations of customers, their changing needs and preferences. This also enhances the company’s competitive advantage;
• Quality of products – the quality of products at the most competitive price also enables the company to attract and retain customers to enable it expand its customer base, grow to enjoy economies of scale which will lead to lower cost and increased profit;
• Industrial relations – industrial relationship is key to enhancing the organisations bargaining power, and obtain information about developments in the industry to enable it respond appropriately;
• Added value – this enable the company to position itself in society as a good cooperate citizen, providing services to society to enhance its public image;
• Highly skilled personnel – highly skilled improve efficiency, quality and creativity to pursue to mission of the organisation in the most cost effective manner.