Bull and Bear Books
“Bull and Bear Books” is a medium sized company who sell special books and videos about business management for the education market. The company was established in 1985 and is run as a partnership. A partnership is a business involving 2-20 people. All the people involved share the costs, skills and ideas. But each person is responsible for each others debts. From time to time, there may be disagreements between partners. “Bull and Bear Books” got most of their business by sending out catalogues to schools, colleges and universities. These catalogues cost the business a lot of money and they get less than a 10% response.
They sometimes buy lists from companies that specialise in the sale of lists but they have found that 25% of them are often inaccurate. The staff at “Bull and Bear Books” are I. T literate and they use a generic commercial packaging for word processing and issuing invoices. The partners want to find a way to develop the existing I. T systems to improve the company’s profits and increase their market share. They also want to use I. T in an integrated way to keep records of their stock and monitor scales. I am to produce a report for them about the way in which they could use I. T in the future. Synopsis
This report will show how “Bull and Bear Books” could use IT to increase they amount of profit they get and their market share. Using IT can make the business more efficient but it can also cause many problems. IT could make the whole business more efficient by cutting costs on wages and keeping better records so that they can keep control of the business. If “Bull and Bear Books” do decide to introduce IT, there is a possibility that many problems could be caused and this report will look at some of these in detail. This report will be mainly about how databases and spreadsheets can be used to keep information.
A database is a collection of information needed for a particular task. It is stored in a way that data from records can be found easily. A spreadsheet is a software package that allows the operator to make financial calculations with a large number of figures; it is also very fast. The company may decide to introduce other technologies along with IT which they might want to use, but this may be inappropriate, for example, “Bull and Bear Books” may want to introduce E-mail but if they are only selling books, then this may not be needed.
If “Bull and Bear Books” do decide to bring IT into the company, they could use databases to make records of each of the customer’s details. A profit and loss account is a summary of the expenses, losses and overheads of a firm, which is used to calculate the net profit over a period of time. The net profit that the business has made during the previous year is shown after all the expenses are taken away from the gross profit. A profit and loss account is a continuation of the trading account. The trading account shows how much money has been spent on stock and how much money was made when the product/service was sold and the gross profit.
Example 1 is an example of a trading account. As you can see, all of the expenses are calculated on the left-hand side and on the right, the sales are also calculated. All of the figures are calculated by using a formula, which is shown in example 2. By using a few starting figures and formulas, you can experiment by putting higher/lower figures. ‘Bull and Bear Books’ could use spreadsheets to produce trading accounts at first and if they want more accurate figures, they could produce profit and loss accounts. Balance Sheet
A balance sheet is a statement of how the financial part of the business is doing at the moment. It shows all that a business owes (liabilities) and all that it owns (assets). Liabilities – There are two main types of liabilities: current and long-term. Long-term liabilities are debts (mortgages or loans) that do not have to be paid within a year. And current liabilities are debts, which demand short-term payments e. g. tax or money owed to creditors and overdrafts. Long-term liabilities are often listed before the current liabilities on a balance sheet.
Assets – This shows all that the business owns from equipment to the amount of cash in the bank. Again there are two different types of assets: Fixed assets and Current assets. Fixed assets are permanent possessions, which enable the business to work e. g. buildings and machinery. Current assets are items that change constantly and are easily converted into cash e. g. stock. Example 3, is an example of a balance sheet. On the right-hand side, it shows the Assets and on the left, the Liabilities are shown. At the bottom of each list, the total amount of money the business still has is shown.
The total of the Liabilities should be equal to the total of the Assets so that they balance. Calculating A Loan Businesses very often need to borrow money whether it’s for new equipment or to see them over a time of difficulty. A loan is when a business borrows money from a bank, but they have to pay additional charge – interest. The interest is the amount the borrower pays to the lender for the use of money. The people, who do decide to have a loan, have to think very carefully about it because they would have to make enough profit not only to pay back the loan but also the interest.
Examples 4 and 5 are both examples of loans. Example 4 shows you that the balance at the beginning is i?? 2000, the interest is 70. 00. This interest is added onto your balance, so, as time goes by, more interest is added onto it. Example 5 starts with the same figure, but this time, the interest is lower and it is all paid back within 9 months, whereas, it took the other one 10 months to pay it all back. Again ‘Bull and Bear Books’ could work out if they could afford to borrow a loan and how long it would take them to pay it all back. Databases A database is another form of computer application.
It is used to store information and it can also sort and search the information in detail. The most important aspect in a database is what information you will put into it. You also have to think about the design and structure of the database. This is important because if you enter in the wrong information, or the wrong fields, then you will not be able to sort and search the data properly and this may result in arguments. Before setting up a database, the person must think carefully about the kind of information they will put on it, whether it’s the customer’s details or the staff’s details.
They must think about what fields they will put on the database. If the person does not set up the database properly, they may have to go back and make some changes, or they might even have to start all over again from scratch. Information that is entered into a database can be used to produce mail-merge letters or you could go into a spreadsheet to see how much money a customer owes. ‘Bull and Bear Books’ are currently storing all their data on a paper-based system. Without a database, they won’t be able to keep good and accurate records.