HSC Business Studies Question Thread

[emilyygeorgexx]

Will they give me financial ratios for the short/long responses. I see they do in the multiple choice. 

Hi Dani,

Financial ratios as a short answer question is a huge possibility, so I would definitely be prepared for that. This means knowing how to calculate the ratio and give a comment on the ratio meaning knowing what the objective its related to, is it good or bad, how does it affect the business, comparing to industry standards/benchmarks and what strategies can the business use to improve the ratio. Remember you will be given the ratios so no need to freak out about memorising them!

In terms of long responses, you could be asked it in the business report as one dot point. This could be something like commenting on the ratios of the business and the recommending strategies to overcome any issues in the business. However, I haven't commonly seen this as a question but in the 2016 HSC they did provide a balance sheet for students to analyse in the business report so I would say anything is a possibility. In terms of the essay, the only time you can really be asked on it is if the question is asking about financial management processes. Even in that situation, you would not necessarily have to write about the ratios as you can write about anything else in the syllabus that falls under financial management processes.

Hope this clears it up and good luck with studying!

[gubby1707]

Hi! i came upon this question and i'm not entirely sure how to answer this
Mainly part a)

[Grace0702]

Hi! i came upon this question and i'm not entirely sure how to answer this
Mainly part a)

Hey!

So basically part a) is asking you to identity when the business falls into debt.
We start in January where we need to find the closing cash balance for that month. This means we need to identity the opening cash balance, cash inflows and cash outflows. Once we have identified this we can use the formula
Opening balance + cash inflows -  cash outflows = closing balance

So for January, the opening cash balance is $4000.
The cash inflows are cash sales and receipts from debtors which add to $30000
The cash outflows include wages, cash purchases, payment to creditors, electricity and annual insurance which add to $22000
(Note: where electricity and insurance are blank it means there were no payments for that month)
We can now sub these figures into the formula
$4000 + $30000 - $22000 = $12000
Therefore the closing cash balance for January is $12000
Remember that the closing cash balance for one month is the opening cash balance for the next month, so the closing balance for January is the opening balance for February

Now, similarly with February we sub in the figures to the above formula.
$12000 + $31000 - $47000 = -$4000
Therefore the closing balance for February is -$4000
Which is a negative balance.

This means March will open with a negative balance. This question is worded a bit odd but I assume they mean which is the first month with a negative opening balance, so I would answer March, but I may be wrong though.

For part b) they are just asking you to make a judgement on the effectiveness of cash flow management strategies in this situation. You could choose to explore: distribution of payments, discounts for early payments or factoring.

I hope this helped a bit!

[Thankunext]

Hey! Can someone help with this multiple choice question?
A manufacturing business has recently changed its marketing strategy to include e-marketing. What external influence may have led to this?
A) increased staffing costs
B) underperforming retail sales
C) the recent employment of a computer expert
D) the inability to differentiate its brand from competitors
Thanks!
I know I asked this question before but many people have told me different answers so I want to ask it again. Hope that is ok!

[Grace0702]

Hey! Can someone help with this multiple choice question?
A manufacturing business has recently changed its marketing strategy to include e-marketing. What external influence may have led to this?
A) increased staffing costs
B) underperforming retail sales
C) the recent employment of a computer expert
D) the inability to differentiate its brand from competitors
Thanks!
I know I asked this question before but many people have told me different answers so I want to ask it again. Hope that is ok!

Hey!

This type of question it is best to work backwards. So lets get rid of what we know the answer can't be.

External influences regard the surrounding environment of a business in which they have little to no control over. Whereas internal influences come from within a business and they have the power to control these.

B is an influence that definitely could've contributed to the businesses choice, however it is within the business, therefore internal, so this cannot be the answer. Similarly with C, the acquisition of new employees is internal as the business made the conscious choice to hire this person.

This leaves us with A and D. Increased staffing costs is external as higher demand my have caused a surge in wages, or possibly changes to award conditions. However, this begins to take us into the HR function which is not really what this question is asking of us. This question comes under marketing strategies, specifically e-marketing. Marketing is all about developing a brand that customers want to purchase from. This leads me to think that D must be the answer. Marketing looks to generate sales by any means, not reduce costs (that is more so operations and finance). So through differentiating their brand in adopting an e-marketing strategy, this business can ultimately increase sales and achieve profit maximisation which is the strategic role of marketing.

I hope my reasoning makes sense and that this helps!

[Thankunext]

Hey!

This type of question it is best to work backwards. So lets get rid of what we know the answer can't be.

External influences regard the surrounding environment of a business in which they have little to no control over. Whereas internal influences come from within a business and they have the power to control these.

B is an influence that definitely could've contributed to the businesses choice, however it is within the business, therefore internal, so this cannot be the answer. Similarly with C, the acquisition of new employees is internal as the business made the conscious choice to hire this person.

This leaves us with A and D. Increased staffing costs is external as higher demand my have caused a surge in wages, or possibly changes to award conditions. However, this begins to take us into the HR function which is not really what this question is asking of us. This question comes under marketing strategies, specifically e-marketing. Marketing is all about developing a brand that customers want to purchase from. This leads me to think that D must be the answer. Marketing looks to generate sales by any means, not reduce costs (that is more so operations and finance). So through differentiating their brand in adopting an e-marketing strategy, this business can ultimately increase sales and achieve profit maximisation which is the strategic role of marketing.

I hope my reasoning makes sense and that this helps!

Thanks for answering my question!
Yeah I kind of understand. I thought the answer was A because all the others seem like internal influences. Like for D the inability to differentiate its brand could be an internal influence because there is something that the business itself is not doing right. But I understand when you link the question to the relevant topic, that is smart. Many thanks!

[jelena_nina2001]

hey peeps how is the answer B? tysm x

[Grace0702]

hey peeps how is the answer B? tysm x

Hey

This is a pretty typical finance question so its important to know how to answer it.

As we can see there is a missing figure for stock, which means we need to find out what that is.
The trick to Balance sheets is that both sides need to balance in order to be accurate.
This means that:
Total assets = Total liabilities + Total equity

So if we add assets we get
Total assets = $143000 + Stock
We add liabilities and owners equity we get
Total liabilities and total equity = $146000

$143000 + Stock = $146000
Therefore for the two sides to equal stock must be $3000

Now we can find the current ratio.
Total current assets = $21000
Total current liabilities = $10500
So:
21000:10500 simplifies to a ratio of 2:1
Meaning for every $1 of current liabilities (short term debt) the business has $2 of current assets

We can see the industry standard for this ratio is 1.9:1 and that this business is slightly above, but it is still acceptable. (also a lot of textbooks describe the ideal current ratio as being 2:1)
So as it is an acceptable ratio the answer will be B

Hope this helped you!

[jelena_nina2001]

Hey

This is a pretty typical finance question so its important to know how to answer it.

As we can see there is a missing figure for stock, which means we need to find out what that is.
The trick to Balance sheets is that both sides need to balance in order to be accurate.
This means that:
Total assets = Total liabilities + Total equity

So if we add assets we get
Total assets = $143000 + Stock
We add liabilities and owners equity we get
Total liabilities and total equity = $146000

$143000 + Stock = $146000
Therefore for the two sides to equal stock must be $3000

Now we can find the current ratio.
Total current assets = $21000
Total current liabilities = $10500
So:
21000:10500 simplifies to a ratio of 2:1
Meaning for every $1 of current liabilities (short term debt) the business has $2 of current assets

We can see the industry standard for this ratio is 1.9:1 and that this business is slightly above, but it is still acceptable. (also a lot of textbooks describe the ideal current ratio as being 2:1)
So as it is an acceptable ratio the answer will be B

Hope this helped you!

so just to clarify,how did you get to $21000?

[Grace0702]

so just to clarify,how did you get to $21000?

$21000 is the sum of all the current assets

Cash + accounts receivable + stock
Which is
$15000 + $3000 + $3000 = $21000

As the current ratio is total current assets divided by total current liabilities

[Thankunext]

Hi!

Should we include definitions in our business reports? My teacher said that we don't have to provide definitions as the business manager, etc. already knows what the strategy or influence is.

[emilyygeorgexx]

Hi!

Should we include definitions in our business reports? My teacher said that we don't have to provide definitions as the business manager, etc. already knows what the strategy or influence is.

Hey!

It depends what you are talking about. Let's say you are going to recommend outsourcing as a strategy. In the case you definitely need to define it in the body paragraph. When writing your responses you need to assume the marker doesn’t know anything about say outsourcing (even though they do).

However, simpler and more common sense definitions such as profitability, market share, sales, etc do not need to be defined.

Good luck with the study and exam tomorrow!

[dani01]

hi would someone be able to explain to me the difference between legal and government policies? with examples of both. I don't really understand how they are different. so far i have that policies guide decision making and a legal regulation has the effect of law. but doesn't this apply to both?
Also examples of corporate social responsibility: doesn't it include community programs? wouldn't sponsoring s sporting event be an example? If anyone can answer both that will be greatly appreciated

[emilyygeorgexx]

hi would someone be able to explain to me the difference between legal and government policies? with examples of both. I don't really understand how they are different. so far i have that policies guide decision making and a legal regulation has the effect of law. but doesn't this apply to both?
Also examples of corporate social responsibility: doesn't it include community programs? wouldn't sponsoring s sporting event be an example? If anyone can answer both that will be greatly appreciated

Hi Dani!

I recently explained this in my last ATAR Notes Business Studies lecture following some of the backlash from the 2019 Catholic Trial. To understand the difference between them, please feel free to download my powerpoint here: https://atarnotes.com/note/lecture-slides-september-2019-12/

Also, with your CSR question I assume you are referring to one of the multiple choice questions from the 2017 HSC exam? So, yes it does include community programs, hence why the answer was introducing a community health program as it focus on the 'social goals' aspect of CSR. Sponsoring an event is not an example for CSR only because there is still an ability to have a monetary benefit/gain. For example, when Powerade sponsors sports games, the audience is exposed to the advertisements from Powerade in which consumers are then likely to go and purchase the product, thus increasing Powerade's sales. The whole idea of CSR is to shift away from specifically only focusing on 'financial goals' but also 'social and environmental goals', in which sponsoring an event doesn't truly encompass this concept of CSR.

Hope that clarified it up

[Thankunext]

Hey!

How do you answer an essay question like explain why CSR is a key concern in operations management?

How should we divide our paragraphs?

And can you talk for example hiring more ATSI people? Because I think that relates to HR and not operations but can we still talk about it?

Many thanks!