Aurelie runs her business as a sole trader. She launched her small hotel 1 year ago with government support. Aurelie realised that developing strong customer relationships would be vital. She now wants to analyse her financial statements by using ratio analysis. A section is shown in Table 3.1. She is concerned that the Government’s proposal to add a new tourist tax of $1 per tourist per night could affect her business.
(a)[2]
Identify two ways a government can support new business start-ups.
(b)[2]
Calculate $X$ and $Y$.
(c)[4]
State four financial ratios a business can use.
(d)[6]
Explain two ways that the introduction of a new tourist tax might affect Aurelie’s business.
(e)[6]
Do you think offering good customer service is the best way for a small business to build customer relationships? Justify your answer.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Provide grants” …