HSC Business Studies Question Thread

[mattmorley]

Hey this is an answer for a report for did for our assesment the other day, hope it helps

Profitability Management, is higly important strategy for NBP, by controlling the businesses costs and revenues.

The strategy of cost controls, involes the use of cost centres, of which are centres being set up to attribute costs to, enabling NBP to understand the prominent sources of expenses within the business. Expense minimiazation, focuses on reducing costs everywhere, wherby reducing costs, profitability of NBP can increase. Cost Controls, is an imperative strateg due to it improving the efficiency  and profitability of  by reducing the expenses  by making employees responsible for their expenses, reducing shortfalls in the expense ratio for NBP.

The strategy of Revenue Controls, , ensures income is flowing into the business on a regular basis, of which is achieved through the use of marketing objectives, such sale and pricing objectives. The use of marketing objectives, are highly important for the financial performance of NBP, as it will improve the profitability of the business, by marketing increasing the sales revenue of NBP, eradicating issues in profitability ratios, improving financial performance

[_____]

Explain how profitability management strategies contribute to the objectives of financial management?

This is for an assessment task, can anyone suggest how to approach the question?

Some ideas off the top of my head:

1. Link cost cutting/expense minimisation with profitability - how the business minimises COGS/expenses to turnover the highest profit possible. Could also delve into efficiency. Mention the expense ratio and GP/NP ratio too.

2. Link revenue controls/marketing objectives with profitability and growth. Cutting failing products to improve profitability for example, or targeting market share through penetration pricing. See what your textbook/notes say about marketing objectives and how they could link to objectives.

3. Getting creative here - link cost cutting with liquidity as the business will have a better current ratio/cash on hand if regular liabilites are cut.

Hope that helps.

[MisterNeo]

Explain how profitability management strategies contribute to the objectives of financial management?

This is for an assessment task, can anyone suggest how to approach the question?

Hi!! 
Profitability is a measurement of the business' efficiency regarding sales revenue and cost of goods sold.
The objectives of finance is to effectively manage the resources of the business to achieve their goals. The obvious one here would be to maximise profits. To maximise profits, you have to reduce expenses and your cost of goods sold, which perfectly relates to profitability.

Management of profitability is to ensure that the business can generate a high enough sales revenue with the product they are selling, and that they don't pay too much for materials in which they make products with (COGS).

Maximising sales revenue
This overlaps into the marketing aspect of business.
-How can a business promote its product better to get more customers to buy it? You can talk about branding, relationship marketing, product differentiation, price points, etc.
-Could they increase the price of their product?
PROS:
-Perception of higher quality (psychological influence). Eg. Apple.
-Generate more profit per unit.
CONS
-Some products have very high elasticity (supply/demand sensitivity to changes in price).
Eg. Luxury goods decrease in demand when prices go up, whereas things like petrol don't decrease demand if prices go up. (This is an economics topic)
-Customers may switch to competitors if prices are higher.

Minimising COGS
-Could you find cheaper items at different suppliers? But newer suppliers do not have pre-established  trust, and may not let you buy on credit until they can trust you. This affects the flexibility of the business operations.
-Offer the current suppliers to pay early for any debts in exchange for discounts. This can improve relationships and the business' financial working capital.
-How about you re-negotiate your contract with the current suppliers?
This may reduce COGS, but it may put off the suppliers, which strains relationships.

Ultimately, these are all ways a business can use to improve their profitability, by either increasing revenue or by decreasing COGS. Management for profitability can ensure that maximum efficiency can be achieved to generate the maximum profits to contribute to business success.
Good luck with your assessment!! 

[jingyi.ren1999]

i'm having a lot of trouble with Finance topic.. I don't really know why.. can someone brief me on the equations and what to do for each? I know how to apply it but I just donno how to apply it to real life business financial reports

[_____]

i'm having a lot of trouble with Finance topic.. I don't really know why.. can someone brief me on the equations and what to do for each? I know how to apply it but I just donno how to apply it to real life business financial reports

Because the syllabus uses very "clean" hypothetical examples, it's not as clear as it would be in a hypothetical balance sheet for example how to apply them to real situations. Here's what I do:

• Find some financial report like QANTAS's or Virgin Australia's preferably in PDF format.
• CTRL+F "assets" for example for the current ratio
• Find the most appropriate reading. The issue is ASX-listed companies with 200 page reports have like 16 different balance sheets per document for things like derivatives, assets for different departments, quarterly stuff etc. Your job is to find the overarching one. If it's not clear move to a different company.
• Calculate the ratio and state what it means. Note that the ratios might not mean what you're been told. Think of comparative ratio analysis. For example a business could have a current ratio of 0.5:1 which is terrible on face value (we've been told it should be 2:1) but is actually good for say an airline. Try to compare it to previous readings (depends what type of questions you're doing).

[julia_warren13]

Does anyone have/know where to find examples of past band 6 responses (for sections III and IV)? Thank you!

[bearbear]

Does anyone have/know where to find examples of past band 6 responses (for sections III and IV)? Thank you!

Hi, here is a link for some sample responses
http://www.boardofstudies.nsw.edu.au/syllabus_hsc/stds-matl/business-studies-sm.html

[Thebarman]

Any tips on how to handle questions making use of financial statements? Our upcoming assessment has given us 3 that we can use while preparing for the task

[MisterNeo]

Any tips on how to handle questions making use of financial statements? Our upcoming assessment has given us 3 that we can use while preparing for the task

Questions on the three financial statements would usually require you to calculate things based on the data given in a hypothetical business' statement and apply them.

They may ask you to "assess the liquidity of a business" based on the financial reports supplied. This means that you should master the ratios and stuff like: Current Ratio, Working Capital, Gross Profit Ratio, Net Profit Ratio, Accounts Receivable Turnover Ratio, Expenses Ratio, etc.
You'd need to know HOW to calculate them and WHY it is used.
Eg. Current ratio is current assets on current liabilities, and it measures a business' ability to pay its debts as they fall due.
You must also be able to assess the financial situation of a business based on the industry average supplied on the financial statement.

One of the questions may be two balance sheets of Business A and Business B. Then you would be asked to compare the two businesses and answer which business is more liquid, solvent, or likely to get credit. (I had this in my assessment)

Cash flow statements questions will ask you to calculate the opening balance of a particular month.
Be warned, read every line of the question because they usually say "The business starts January with 10000, calculate the opening balance in June." Most people don't see the 10000 and start calculating January at 0, thus getting the question wrong.
(Happened to my friend lol)

Basically, revise ratios on balance sheets and profit/loss statements. The cash flow statement doesn't have ratios. Practise, practise, and practise again. Good luck!! 

[diesxel]

Hello,

I had some questions about operations that I would really appreciate if someone could explain please

What is the difference between government and legal influences?

What is visibility? (as an influence in the transformation process)

How does critical path analysis (CPA) work? Very confused about this!

Thats all for now!! Thanks


I have an exam on operations marketing and hr next week so I'm spazzing out D;

Thank you!!

[MisterNeo]

Hello,

I had some questions about operations that I would really appreciate if someone could explain please

What is the difference between government and legal influences?

What is visibility? (as an influence in the transformation process)

How does critical path analysis (CPA) work? Very confused about this!

Thats all for now!! Thanks


I have an exam on operations marketing and hr next week so I'm spazzing out D;

Thank you!!

Hey there! 

The syllabus dot point on "Influences on Operations" has government policies and legal regulations.
Government policies are to do with things like taxes and bans, whereas legal regulations are to do with workplace issues like OH&S, anti-discrimination, and minimum wages.

The term "visibility" refers to how much of the operations process can be seen and tracked by the customer.
-For example, Subway has high visibility because they make the sandwich right in front of you when ordered. However, McDonalds has low visibility because their burgers are pre-made hidden at the back of the store.

Critical Path Analysis is a diagram showing the shortest time it takes for all tasks in an operations process to be completed. To find the critical path, you have to look for the longest path in terms of time it takes to complete. Once the longest task is done, everything else has already finished, thus being the time it takes to complete all tasks. It is used to measure the sequencing and scheduling of the processes and to reduce bottlenecks, which can paralyse the entire operations if one tasks takes longer than expected.

Hope this helps

[hansolo9]

How would I go about answering this for a long response? What key points should I write my bodies on?

"Describe the strategic role that human resource management has within a business and analyse this role in its interdependence with other key business functions."

[Thebarman]

Would a current ratio of 1.35:1 and 1.08:1 be sound financial positions?

[MisterNeo]

Would a current ratio of 1.35:1 and 1.08:1 be sound financial positions?

A current ratio of 1.35:1 or 1.08:1 is a sound financial position, but offers little protection to sudden fluctuations to the market such as natural disasters. The business can risk becoming insolvent in the long term even if they generate a positive return.
The best judgement is to compare it to the the industry average, which is usually supplied with the balance sheet. If not, just go with the general rule of 2:1 as a decent ratio.
 

[SSSS]

Hey guys  I have an assessment in two days, and it is a case study response on human resource. The thing is we know it is on strategies, but it can be linked with anything. The thing is could a question ask about how strategies can be evaluated through the use of indicators or how strategies can assist the human resource management? I know for certain it can relate to influences, as they can ask how human resource strategies attempt to combat influences, or roles, as they can link it to the strategic role. But what about indicators or the process? Thanks guys!!