Business finance

Identify and explain two reasons why quality matters for CC.

Feb/March 2018

Identify and explain how the following four changes could influence the success of the new business. The economic cycle in country Z moves from boom into recession. Government in country Z lowers income tax. New legal controls so all packaging for takeaways must be able to be recycled. New legal controls that all menus must contain full information on the ingredients used.

Feb/March 2019

AH is an insurance company. It operates within a highly competitive market. AH employs 1000 workers, including 50 supervisors. Those supervisors adopt an autocratic leadership style. AH currently has a 5% market share and is planning to acquire a competitor. The Managing Director is weighing up how to communicate the takeover to AH’s employees. There are many finance sources available to support business growth.

Feb/March 2023

Explain two advantages and two disadvantages for AF of using retained profit to finance the investment in the factory.

Feb/March 2024

The Government has raised interest rates in an effort to reduce inflation. Identify and explain two ways that higher interest rates could affect FF.

May/June 2016

CLG operates six airports in country L. The directors plan to enlarge its main airport by adding another runway for aircraft to land on and take off from. That will cost $300m. Selecting an appropriate finance source will matter. The Managing Director said: ‘CLG may be able to provide 50 extra flights each day. There are environmental pressures, including the loss of green spaces and additional pollution. There will also be external benefits. I hope the Government approves the building of the new runway.’ Interest rates rose in 2017.

May/June 2018

Identify and explain one advantage and one disadvantage of leasing every item of equipment used by the business.

May/June 2018

Explain how FO could make use of one internal source and one external source of finance as it grows.

May/June 2021

Explain two ways in which the market research data in Appendix 1 could support Ruben when making business decisions.

May/June 2021

Explain, with an example, one reason why VP might need: • short-term finance • long-term finance.

May/June 2023

Explain two factors EP ought to consider when selecting a source of finance.

May/June 2024

Explain two business objectives Santhosh may have for RF.

May/June 2024

Explain four external finance sources a business could use.

May/June 2025

Identify and explain two objectives that Joey and Jennifer could set for the business.

Oct/Nov 2015

APQ is a multinational company. It produces chemicals that are sold to farmers, helping them to increase food output. It intends to set up a factory in country X, a developing country with low interest rates. The Finance Director said: ‘This factory will generate many external benefits. APQ is a public limited company that aims to behave ethically towards all of its stakeholders.’ The new factory will cost $100m and APQ will face an opportunity cost. The Finance Director cannot decide which source of finance should be chosen for the new factory.

Oct/Nov 2016

Identify and explain one advantage and one disadvantage of GS operating as a partnership. Positive point: Explanation: Negative point: Explanation:

Oct/Nov 2017

AllPlay is a toy shop founded by Vince in 2012. Every year, Vince has achieved his business objectives, including making a profit in 2017. AllPlay brings in all of its products from overseas. Vince plans to grow the business by opening a second shop so that he can offer a broader selection of products. Buying the shop will cost $20 000. A bank loan is one possible source of finance. Vince’s bank manager will want to examine AllPlay’s income statement, together with other financial documents.

Oct/Nov 2018

LBM operates as an online retailer of fashion clothing. LBM’s target market consists of 18-35 year olds. In the previous year, revenue rose by 25% to $600m. The Marketing Director stated: ‘Every business must meet customer needs. Customer service matters, so all staff are given induction training. LBM provides customers with a broader product range than its competitors. Promotion takes place via social media networks. Is there any reason to open our own shops?’ LBM intends to introduce 3500 new styles every week and will have to secure finance for the extra inventory.

Oct/Nov 2019

Explain why liquidity and profitability matter to a business.

Oct/Nov 2020

BGR is a private limited company, and it runs 6 cinemas in towns in different areas. Effective internal communication matters to BGR. The Finance Director has been studying BGR’s accounts, and an extract is given in Table 4.1. BGR intends to open another cinema and will need to employ 10 new staff. The new cinema will cost $8m. The Finance Director must choose whether BGR should issue new shares or take a bank loan to fund the expansion.

Oct/Nov 2021

Explain four factors that could influence the source of finance a business chooses to use. Factor 1: Factor 2: Factor 3: Factor 4:

Oct/Nov 2021

NFF is a fishing business that catches fish and other seafood, so it operates in the primary sector. It owns 6 fishing boats and employs 36 workers. NFF places importance on helping to achieve sustainable development. Jennifer, who owns the business, has drawn up NFF’s statement of financial position. An extract appears in Table 1.1. NFF has a high level of debt, and Jennifer wants information about internal sources of finance that the business could use.

Oct/Nov 2022

Explain four ways in which quality is important to a business.

Oct/Nov 2022

Explain four factors that a business ought to take into account when deciding which source of finance to use for expansion.

Oct/Nov 2023