2.1 The case of a fictitious company
The case of an imaginary company, Remote Sensors Plc, will be used for the purposes of the worked examples throughout this course. It is important that you familiarise yourself with these financial statements so that you understand the workings in conducting various types of financial analysis.
Example: The case of Remote Sensors Plc
Remote Sensors Plc is a small single entity company that manufactures electrical equipment for commercial and household use. The company was established in 2021 and has just one warehouse. The management is gradually expanding the company’s business.
Assume that you are a trainee in an accounting firm that has been approached by a client who is interested in making a substantial investment in the company’s shares. You are required to prepare a report on Remote Sensors Plc’s financial position and financial performance.
The following data have been extracted from the statements of financial position and the statement of profit or loss of Remote Sensors Plc.
| 2025 | 2024 | 2023 | |
|---|---|---|---|
| £ | £ | £ | |
| Assets | |||
| Land and buildings | 26,310 | 20,130 | 19,880 |
| Computers and equipment | 2,460 | 2,340 | 2,820 |
| Vehicles | 10,381 | 9,490 | 9,580 |
| Total non-current assets | Total 39,151 | Total 31,960 | Total 32,280 |
| Current assets | |||
| Inventory | 2,056 | 2,501 | 1,860 |
| Receivables | 1,982 | 1,750 | 2,280 |
| Other current assets | 1,280 | 2,175 | 1,670 |
| Cash and cash equivalents | 7,980 | 9,270 | 6,350 |
| Total current assets | 13,298 | 15,696 | 12,160 |
| Total assets | Total 52,449 | Total 47,656 | Total 44,440 |
| Equity | |||
| Equity share capital (nominal value £1 each) | 16,000 | 16,000 | 16,000 |
| Reserves | |||
| Retained earnings | 25,980 | 24,155 | 21,790 |
| Total equity | 41,980 | 40,155 | 37,790 |
| Non-current liabilities | |||
| Interest-bearing loans and borrowings | Total 5,600 | Total 2,990 | Total 2,580 |
| Current liabilities | |||
| Trade payables | 3,200 | 2,166 | 1,610 |
| Interest-bearing loans and borrowings | 1,000 | 1,745 | 1,900 |
| Corporation tax payable | 669 | 600 | 560 |
| Total current liabilities | 4,869 | 4,511 | 4,070 |
| Total liabilities | 10,469 | 7,501 | 6,650 |
| Total equity and liabilities | Total 52,449 | Total 47,656 | Total 44,440 |
| 2025 | 2024 | 2023 | |
|---|---|---|---|
| £ | £ | £ | |
| Sales revenue | 17,860 | 16,995 | 15,990 |
| Cost of sales | (10,590) | (10,660) | (9,876) |
| Gross profit | 7,270 | 6,335 | 6,114 |
| Administrative expenses | (3,150) | (2,820) | (2,630) |
| Profit before interest and tax | 4,120 | 3,515 | 3,484 |
| Net interest payable | (890) | (390) | (359) |
| Profit before taxation | 3,230 | 3,125 | 3,125 |
| Taxation | (290) | (250) | (210) |
| Profit attributable to shareholders | Total 2,940 | Total 2,875 | Total 2,915 |