HSC Business Studies Question Thread

[Celina muscat]

Hi Guys, I have an assignment for marketing and I'm required to explain the elements of a marketing plan. However the textbook isn't very clear on what should be in the marketing plan and when I look it up I get different answers. So could someone please clarify what should be included in a marketing plan.
Thank you 😊

[isaacdelatorre]

Hello!
could you please help me in differentiating between government policies and legal regulations as influences on operations. they legit seems the same thing i cant tell the difference between the two

Thank you heaps!

Hey Kiiaaaa,

I believe someone asked a question quite similar to this a few days ago, just look at page 5 of the business studies question thread here

Lemme know if you need further explanation or clarification

Happy studying!!

Hey I was wondering what you meant exactly by making up a case study on the spot. Did you mean it is fine to create my own hypothetical business? Or did you mean to come up with a common real life example (eg. Woolworths practicing loss leader with milk)?

Hey Rodero,

by making up a case study, I mean that I made up a fake business and wrote about how this fake business used the strategy/influence that I was talking about effectively and made up a result. E.g. The scandal over Bob's Boots alleged dumping of waste in the local lake has sparked outrage and controversy amongst the local community. This poor disposal of waste management and unethical actions completely disregard social changes regarding environmental sustainability and as such, local citizens of Dubbo began to boycott Bob's Boots' products. According to the SMH 2016, Bob's Boots recorded a net loss of $13,000, down from a net profit of $20000 the previous year, hence demonstrating the significant consequence when a business fails to respond to external influences such as CSR and environmental sustainability.

That was kind of terrible since it was off the top of my head, but you get the point - completely made up (the hardest part I found was coming up with names that sounded legit - obviously Bob's Boots doesnt)

You could also go with the explanation you said, use an existing business and pretend they use the said strategy (Woolies using loss leaders on milk) - with a further explanation, that would work just as well

Hope this helps!!

Hi Guys, I have an assignment for marketing and I'm required to explain the elements of a marketing plan. However the textbook isn't very clear on what should be in the marketing plan and when I look it up I get different answers. So could someone please clarify what should be included in a marketing plan.
Thank you 😊

Hi Celina,

The marketing plan is a document that lists activities aimed at achieving particular marketing outcomes in relation to goods or services. The plan provides a template for future action aimed at reaching business goals, such as profit maximisation.

In essence, if you look at the Processes dot point of the marketing section; these are the elements that would make up a marketing plan
1.   Situation analysis
2.   Market research
3.   Establishing market objectives
4.   Identifying target markets
5.   Developing marketing strategies
6.   Implementation, monitoring and controlling

This marketing plan is the framework for the business' way forward in terms of marketing. i.e. it will include an executive summary as well as a look at where the business is now, market research telling them what customers want so they can cater towards that market and then steps the business will take to get to where it wants to be.

Hope this helps!

[natasha.rh]

Hello!
How is the best way to approach a marketing essay where the question is given on the day? We have been told to memorise the marketing section in the Apple case study and know the syllabus and we'll be fine. Just wondering how else I could prepare (I've done 2 practice questions).
Thanks in advance

[phebsh]

Hi there, I am just unsure of what to know for product life cycle; is the last stage that we should know post-maturity or should we just remember decline? In my textbook it says decline but my teacher is telling me post-maturity, I wonder if either is acceptable... Thanks

[joyg]

Hello!
How is the best way to approach a marketing essay where the question is given on the day? We have been told to memorise the marketing section in the Apple case study and know the syllabus and we'll be fine. Just wondering how else I could prepare (I've done 2 practice questions).
Thanks in advance

Your preparation sounds good just keep on practising and get them marked to ensure that you are on the right track, with the syllabus just make sure you also remember the sub points, e.g consumer laws - deceptive and misleading advertising, price discrimination, implied conditions and warranties because if a question is asked in relation to the dot point it is expected that you also write about the sub points.
Good luck!   

[joyg]

Hi there, I am just unsure of what to know for product life cycle; is the last stage that we should know post-maturity or should we just remember decline? In my textbook it says decline but my teacher is telling me post-maturity, I wonder if either is acceptable... Thanks

For the product life cycle the last stage is the post maturity stage however in this stage a business can take 4 different paths: decline, renewal, steady state or cessation. If a question asks about the product life cycle for the post maturity stage you could write something along the lines of
" In the post maturity stage a business can take one of four paths : decline, renewal, steady state or cessation." and continue on to explain this stage with the amount depending on the mark value
Hopefully this helps feel free to ask for a further explanation if needed 

[natasha.rh]

Your preparation sounds good just keep on practising and get them marked to ensure that you are on the right track, with the syllabus just make sure you also remember the sub points, e.g consumer laws - deceptive and misleading advertising, price discrimination, implied conditions and warranties because if a question is asked in relation to the dot point it is expected that you also write about the sub points.
Good luck!   

thanks so much!! hopefully i went well 

[kiiaaa]

HELLO EVERYONE!
I'm struggling like legit struggling to find case studies on finance. i have gone through the apple and qantas books but they don't really help in case studies for sources of finance (in particular)  etc. Is there anyone who could please help me out? Desperate case here
Thank you very much!

[isaacdelatorre]

HELLO EVERYONE!
I'm struggling like legit struggling to find case studies on finance. i have gone through the apple and qantas books but they don't really help in case studies for sources of finance (in particular)  etc. Is there anyone who could please help me out? Desperate case here
Thank you very much!

Hey Kiaaa,
I posted some case studies I had a while back - as in last year when I sat the HSC (note they may be out of date). I've just copy pasted them into the spoiler below because I forgot how to hyperlink 

Also, I didn't do case studies as a giant block which covered the whole syllabus.. I just found a case study for each dot point as you can see below

Spoiler

Hi Dylan,
The question was pretty vague in terms of what parts of the finance syllabus you need a case study for. So here are all the ones that I've prepared. This is by no means a definitive list, so you can definitely add your own or make up a realistic example on the day.

I haven't included any on the objectives of financial management as these can be easily made up, e.g. QANTAS stated in their financial review that they were focussing on increasing their net profit by 15% in the next 2 years etc.

Influences of Financial Management

Internal Sources of Finance
Retained profits - ZARA utilises its retained profits to re-invest ($1 billion each year) back into the business each year which generated over $3 billion more than the previous year
External Sources of Finance
Overdraft - Woolworths uses overdrafts to buy stock which can be repaid after it is sold - maintaining liquidity and profitability as overdraft does not exceed $200,000
Factoring - Turkish Rugs Manufacturers used factoring to grow their exports. In order to improve their liquidity, they sold their accounts receivable to a factoring company which helped the firm meet their short term financial obligations as well as decrease their accounts receivable turnover ratio by 5%
Mortgage – Woolworths took out a $4m mortgage. This has allowed Woolworths to open new distribution centres around NSW to reach further locations whilst maintaining product quality due to closer proximity
Leasing – WiseTech Global has an office layout organised into many work stations. As a result, the business uses operating leases for its computers so instead of buying them and end up becoming obsolete and losing value, the business can lease and constantly update its equipment when required. This improves the business’s solvency as well.
Rights Issue – Boral, a major supplier of building products wishes to restructure its operations. As part of these plans Boral wishes to raise $440m through a $4.10 rights issue.
Share Purchase Plan – AMP used a share purchase plan where shareholders could buy shares at $4.82 which was at a 5% discount. This allowed AMP for the expansion of its operations.
ASX – IN 2009, Australia’s largest chain of department stores, Myer, went public and entered the Australian Securities Exchange. It raised approximately $2.3b from the Initial Public Offering. The ASX allowed Myer to raise large amounts of capital so that Myer could fund its aggressive expansion. This included increasing the number of stores and improving their flagship stores.
Finance companies – Apple has a scheme set up where they lease Mac, iPads, iPhones etc over 24 months to business. To do this, Apple has utilised a finance company called BOQ Finance to help fund their Apple Financial Services. As a result, the business has been able to increase the number of sales from businesses.

Influence of Government
Company Taxation – Apple has an income of about $6.1b, but only $247m of that was taxable income. It paid $74m tax.
ASIC – The CBA will refund around 8400 customers approximately $7.6m after it failed to apply fee waivers and ongoing benefits to AgriAdvantage Plus package holders over a number of years. This problem was reported to ASIC under its breach reporting obligations. The problem was actually reported by CBA themselves. As a result, CBA was able to avoid any potential fines and damaged reputation if they tried to cover up the issue.

Global Market Influences
Economic Outlook – In 2009 the GFC caused rapid revenue declines especially in international markets leading to an 88% fall in net profit for QANTAS in 2009. It also reduced its flying capacity, reduced orders for new planes and replacing some parts of Qantas with Jetstar.
Availability of Funds – Since the GFC supply has been lower both in Australia and overseas for Qantas due to the closure of many financial institutions and lending criteria becoming stricter. Qantas was assessed to be riskier for lenders due to its reduced profits in 2014 and this affected Qantas’ availability of funds – their credit rating was higher and therefore more interest.
Interest Rates – Qantas is exposed to movements in interest rates both in Australia and overseas. An increase in interest rates increases the interest repayments Qantas pays on its borrowings. Qantas has a number of operations overseas and it was more cost effective to fund them from overseas banks due to lower interest rates.

Processes of Financial Management
Planning and Implementing - Qantas

• Assessing the current financial information by collecting financial data
• Using the information to frame the business plan
• Preparing financial reports
• Interpreting financial reports by comparing actual to forecast results
• Adjusting financial controls to minimise risks and losses

Monitoring and Controlling
Cash Flow Statement – Qantas produces cash flow statements in its Annual reports for each year. Usually it has around $3000m cash at the end of the financial year.
Balance Sheet
Current assets - $4932m
Non-current assets - $17318m
Current liabilities - $7525m
Non-current liabilities $2866m.
Income Statement
Sales revenue is usually around $15,000m
Fuel costs $4461m.
Net profit 2014 – -$2843m
2013 - $6m
2012 - -$244m
2011 - $249m

Financial Ratios
QANTAS
Net Profit ratio – 2014- -4.2%, 2013-1.2%, 2012, 0.6%, 2011-3.7%. Profitability in the airline industry is relatively poor on average. The airline industry is both highly capital intensive and extremely competitive. Lots of costs.
Return on Owner’s Equity – 2014- -22.5%, 2013 – 3.2%, 2012 – 1.7%, 2011 – 9%
Liquidity ratio – 0.66:1 – 2014.    2010 – 0.93:1. Qantas operates on a negative working capital position, like most other airlines. Qantas holds very little cash reserves and uses the cash received to pay long term debt. Other Airlines – Air NZ – 0.98:1, Singapore 1.4:1.
Gearing – 2014 – 163%, 2013 – 83%, 2012 – 96^, 2011 – 113%, 2010 104%.
COCA COLA AMATIL
Gearing – 2001 – 60%, 2002 – 50%, 2003 – 55%. Their solvency has improved in recent years. The company used much of the revenue from the sales of its Philippines business to pay off debt.
Efficiency – Company’s expense ratio rising from 39% to 40% from 2000 to 2003 due to investment in plant and machinery, so theoretically their efficiency will increase in the future.

Limitations of financial Reports
Notes to the financial statements – Qantas attaches comprehensive notes to its financial statements. These help stakeholders better understand the financial reports and give more clarity to Qantas’ financial position. Some information may include the term of loans, where certain assets are coming from etc. Qantas uses UNDERLYING PBT as its measure of profitability.
Debt Repayments – Qantas’ financial reports don’t give a full picture of their debt as it does not disclose when these debts have to be repaid.
Normalised earnings – Some special circumstances may distort the analysis of Qantas’ results. For example, in 2011 natural disasters and major weather events like Cyclone Yasi, the Christchurch earthquake and japan Tsunami effected Qantas’ profitability.
Valuing assets – It is difficult to value Qantas’ assets because they change over time. Qantas’ long term assets are depreciated over time but the value of these assets may not reflect their true market value.

Ethical Issues related to Financial Management
Here you can say any business undergoes regular review through audits and through bodies such as ASIC to ensure accurate financial reports

Financial Management Strategies
Cash Flow Management
Discounts for early payment – Harvey Norman encourages customers to pay the full amount for expensive goods such as fridges and TVs using discounts for early payment otherwise customers are charged interest for a loan or they have to sign up to an alternative credit card.
Factoring - Turkish Rugs Manufacturers used factoring to grow their exports. They were in a panic situation in their cash flow as they had run out of money and had to chase their customers aggressively to get paid. In order to improve their liquidity, they sold their accounts receivable to a factoring company.

Working Capital Management
Leasing – Leasing more aircraft, building and plant and equipment. Leasing has freed cash that can be used elsewhere in the business. Debt market trends, tax depreciation, deterioration in aircraft residual rates and the need to provide greater fleet flexibility have increased the attractiveness of leasing. (Qantas)
Sale and lease back – Qantas is one of the few airlines in the world to own its own terminals and is considering selling and leasing them back to improve its working capital.
Control of current assets (inventory) – The value of APPLE’s inventory is calculated using the FIFO method. The value of inventory increased by 123% in 2013. This was due to the reduced demand for the iPhone 5C suggesting demand was lower than expected. As a result, Apple significantly reduced production for the 5c.

Profitability Management
Cost Controls – Expense Minimisation (Qantas)
Qantas has reduced its cost by 20% over the last 10 years by
-   Cutting flying capacity and cutting services back
-   Cancelling orders for new planes
-   Restructuring
-   Fuel conservation
-   Reforming employment relations – increased use of technology, casualisation
-   Outsourcing more business functions
-   Encouraging more sales through the internet.
Revenue controls – Marketing Objectives (Qantas)
-   Setting clear sales objectives
-   Setting up a sales reporting system that reports sales figures regularly and breaks them down into business segments
-   Discounting of airfares to maintain loads in a shrinking market
-   Targeting different markets through Jetstar
-   Increasing revenue through other services such as travel, catering and freight
-   New business class services, self-service kiosks, next generation check in, new advertising campaign.

Global Financial Management
Exchange Rates (Qantas)
Qantas is exposed to various financial risks in international businesses.
-   Changes in foreign exchange rates – expenditures of jet fuel, lease payments and interest repayments are usually made in a foreign currency.
-   Qantas generates about 38% of revenue from other currencies.
APPRECIATION – Qantas pays less for fuel, lease repayments, loan repayments and overseas capital expenditure.
DEPRECIATION – Qantas pays more for fuel, lease repayments, loan repayments and overseas capital expenditure.
Interest Rates (Qantas)
Qantas is exposed to movements in interest rates both in Australia and overseas. An increase in interest rates increases the interest repayments Qantas pays on its borrowings. Qantas has a number of operations overseas and it was more cost effective to fund them from overseas banks due to lower interest rates.
Hedging and Derivatives (Qantas)
Forward Cover and Options – Qantas uses these to hedge future fuel purchases, future interest payments and future capital expenditure payments.
Qantas has hedged about 94% of its fuel needs for 2015. Most of these hedges are in the form of options.
Swap Contracts – Qantas earns revenue in many currencies and incurs costs especially fuel, maintenance and leasing in other countries. Swaps is another derivative used by Qantas which involves foreign currency denominated costs being paid out of revenue in the same currency. Qantas also denominates some borrowings in net surplus currencies to provide a natural hedge.
Methods of International Payment (Noventus Pty Ltd)
Payment in Advance – For its computing/electric products as it guarantees cash inflows. Noventus does this as it recently lost $10,000 in exporting products overseas without payment which had significant impact on its profitability management and liquidity which could have been used to repay debts.
There is no international legislation or body that regulates payment overseas.
Bill of exchange against payment – MIR-AUS is a company specialising in installation of ink systems for printers. They import a large amount of ink from overseas companies and therefore it can be risky if payment is sent before the quality of the ink is checked. When the business picks up the ink, a bill against payment is used so that MIR-AUS can inspect the ink delivered before accepting and paying for it.

Sorry, that was a bit excessive. But I hope this was of some help to you Good luck[/list][/list]

[kiiaaa]

Hey Kiaaa,
I posted some case studies I had a while back - as in last year when I sat the HSC (note they may be out of date). I've just copy pasted them into the spoiler below because I forgot how to hyperlink 

Also, I didn't do case studies as a giant block which covered the whole syllabus.. I just found a case study for each dot point as you can see below

Spoiler

Hi Dylan,
The question was pretty vague in terms of what parts of the finance syllabus you need a case study for. So here are all the ones that I've prepared. This is by no means a definitive list, so you can definitely add your own or make up a realistic example on the day.

I haven't included any on the objectives of financial management as these can be easily made up, e.g. QANTAS stated in their financial review that they were focussing on increasing their net profit by 15% in the next 2 years etc.

Influences of Financial Management

Internal Sources of Finance
Retained profits - ZARA utilises its retained profits to re-invest ($1 billion each year) back into the business each year which generated over $3 billion more than the previous year
External Sources of Finance
Overdraft - Woolworths uses overdrafts to buy stock which can be repaid after it is sold - maintaining liquidity and profitability as overdraft does not exceed $200,000
Factoring - Turkish Rugs Manufacturers used factoring to grow their exports. In order to improve their liquidity, they sold their accounts receivable to a factoring company which helped the firm meet their short term financial obligations as well as decrease their accounts receivable turnover ratio by 5%
Mortgage – Woolworths took out a $4m mortgage. This has allowed Woolworths to open new distribution centres around NSW to reach further locations whilst maintaining product quality due to closer proximity
Leasing – WiseTech Global has an office layout organised into many work stations. As a result, the business uses operating leases for its computers so instead of buying them and end up becoming obsolete and losing value, the business can lease and constantly update its equipment when required. This improves the business’s solvency as well.
Rights Issue – Boral, a major supplier of building products wishes to restructure its operations. As part of these plans Boral wishes to raise $440m through a $4.10 rights issue.
Share Purchase Plan – AMP used a share purchase plan where shareholders could buy shares at $4.82 which was at a 5% discount. This allowed AMP for the expansion of its operations.
ASX – IN 2009, Australia’s largest chain of department stores, Myer, went public and entered the Australian Securities Exchange. It raised approximately $2.3b from the Initial Public Offering. The ASX allowed Myer to raise large amounts of capital so that Myer could fund its aggressive expansion. This included increasing the number of stores and improving their flagship stores.
Finance companies – Apple has a scheme set up where they lease Mac, iPads, iPhones etc over 24 months to business. To do this, Apple has utilised a finance company called BOQ Finance to help fund their Apple Financial Services. As a result, the business has been able to increase the number of sales from businesses.

Influence of Government
Company Taxation – Apple has an income of about $6.1b, but only $247m of that was taxable income. It paid $74m tax.
ASIC – The CBA will refund around 8400 customers approximately $7.6m after it failed to apply fee waivers and ongoing benefits to AgriAdvantage Plus package holders over a number of years. This problem was reported to ASIC under its breach reporting obligations. The problem was actually reported by CBA themselves. As a result, CBA was able to avoid any potential fines and damaged reputation if they tried to cover up the issue.

Global Market Influences
Economic Outlook – In 2009 the GFC caused rapid revenue declines especially in international markets leading to an 88% fall in net profit for QANTAS in 2009. It also reduced its flying capacity, reduced orders for new planes and replacing some parts of Qantas with Jetstar.
Availability of Funds – Since the GFC supply has been lower both in Australia and overseas for Qantas due to the closure of many financial institutions and lending criteria becoming stricter. Qantas was assessed to be riskier for lenders due to its reduced profits in 2014 and this affected Qantas’ availability of funds – their credit rating was higher and therefore more interest.
Interest Rates – Qantas is exposed to movements in interest rates both in Australia and overseas. An increase in interest rates increases the interest repayments Qantas pays on its borrowings. Qantas has a number of operations overseas and it was more cost effective to fund them from overseas banks due to lower interest rates.

Processes of Financial Management
Planning and Implementing - Qantas

• Assessing the current financial information by collecting financial data
• Using the information to frame the business plan
• Preparing financial reports
• Interpreting financial reports by comparing actual to forecast results
• Adjusting financial controls to minimise risks and losses

Monitoring and Controlling
Cash Flow Statement – Qantas produces cash flow statements in its Annual reports for each year. Usually it has around $3000m cash at the end of the financial year.
Balance Sheet
Current assets - $4932m
Non-current assets - $17318m
Current liabilities - $7525m
Non-current liabilities $2866m.
Income Statement
Sales revenue is usually around $15,000m
Fuel costs $4461m.
Net profit 2014 – -$2843m
2013 - $6m
2012 - -$244m
2011 - $249m

Financial Ratios
QANTAS
Net Profit ratio – 2014- -4.2%, 2013-1.2%, 2012, 0.6%, 2011-3.7%. Profitability in the airline industry is relatively poor on average. The airline industry is both highly capital intensive and extremely competitive. Lots of costs.
Return on Owner’s Equity – 2014- -22.5%, 2013 – 3.2%, 2012 – 1.7%, 2011 – 9%
Liquidity ratio – 0.66:1 – 2014.    2010 – 0.93:1. Qantas operates on a negative working capital position, like most other airlines. Qantas holds very little cash reserves and uses the cash received to pay long term debt. Other Airlines – Air NZ – 0.98:1, Singapore 1.4:1.
Gearing – 2014 – 163%, 2013 – 83%, 2012 – 96^, 2011 – 113%, 2010 104%.
COCA COLA AMATIL
Gearing – 2001 – 60%, 2002 – 50%, 2003 – 55%. Their solvency has improved in recent years. The company used much of the revenue from the sales of its Philippines business to pay off debt.
Efficiency – Company’s expense ratio rising from 39% to 40% from 2000 to 2003 due to investment in plant and machinery, so theoretically their efficiency will increase in the future.

Limitations of financial Reports
Notes to the financial statements – Qantas attaches comprehensive notes to its financial statements. These help stakeholders better understand the financial reports and give more clarity to Qantas’ financial position. Some information may include the term of loans, where certain assets are coming from etc. Qantas uses UNDERLYING PBT as its measure of profitability.
Debt Repayments – Qantas’ financial reports don’t give a full picture of their debt as it does not disclose when these debts have to be repaid.
Normalised earnings – Some special circumstances may distort the analysis of Qantas’ results. For example, in 2011 natural disasters and major weather events like Cyclone Yasi, the Christchurch earthquake and japan Tsunami effected Qantas’ profitability.
Valuing assets – It is difficult to value Qantas’ assets because they change over time. Qantas’ long term assets are depreciated over time but the value of these assets may not reflect their true market value.

Ethical Issues related to Financial Management
Here you can say any business undergoes regular review through audits and through bodies such as ASIC to ensure accurate financial reports

Financial Management Strategies
Cash Flow Management
Discounts for early payment – Harvey Norman encourages customers to pay the full amount for expensive goods such as fridges and TVs using discounts for early payment otherwise customers are charged interest for a loan or they have to sign up to an alternative credit card.
Factoring - Turkish Rugs Manufacturers used factoring to grow their exports. They were in a panic situation in their cash flow as they had run out of money and had to chase their customers aggressively to get paid. In order to improve their liquidity, they sold their accounts receivable to a factoring company.

Working Capital Management
Leasing – Leasing more aircraft, building and plant and equipment. Leasing has freed cash that can be used elsewhere in the business. Debt market trends, tax depreciation, deterioration in aircraft residual rates and the need to provide greater fleet flexibility have increased the attractiveness of leasing. (Qantas)
Sale and lease back – Qantas is one of the few airlines in the world to own its own terminals and is considering selling and leasing them back to improve its working capital.
Control of current assets (inventory) – The value of APPLE’s inventory is calculated using the FIFO method. The value of inventory increased by 123% in 2013. This was due to the reduced demand for the iPhone 5C suggesting demand was lower than expected. As a result, Apple significantly reduced production for the 5c.

Profitability Management
Cost Controls – Expense Minimisation (Qantas)
Qantas has reduced its cost by 20% over the last 10 years by
-   Cutting flying capacity and cutting services back
-   Cancelling orders for new planes
-   Restructuring
-   Fuel conservation
-   Reforming employment relations – increased use of technology, casualisation
-   Outsourcing more business functions
-   Encouraging more sales through the internet.
Revenue controls – Marketing Objectives (Qantas)
-   Setting clear sales objectives
-   Setting up a sales reporting system that reports sales figures regularly and breaks them down into business segments
-   Discounting of airfares to maintain loads in a shrinking market
-   Targeting different markets through Jetstar
-   Increasing revenue through other services such as travel, catering and freight
-   New business class services, self-service kiosks, next generation check in, new advertising campaign.

Global Financial Management
Exchange Rates (Qantas)
Qantas is exposed to various financial risks in international businesses.
-   Changes in foreign exchange rates – expenditures of jet fuel, lease payments and interest repayments are usually made in a foreign currency.
-   Qantas generates about 38% of revenue from other currencies.
APPRECIATION – Qantas pays less for fuel, lease repayments, loan repayments and overseas capital expenditure.
DEPRECIATION – Qantas pays more for fuel, lease repayments, loan repayments and overseas capital expenditure.
Interest Rates (Qantas)
Qantas is exposed to movements in interest rates both in Australia and overseas. An increase in interest rates increases the interest repayments Qantas pays on its borrowings. Qantas has a number of operations overseas and it was more cost effective to fund them from overseas banks due to lower interest rates.
Hedging and Derivatives (Qantas)
Forward Cover and Options – Qantas uses these to hedge future fuel purchases, future interest payments and future capital expenditure payments.
Qantas has hedged about 94% of its fuel needs for 2015. Most of these hedges are in the form of options.
Swap Contracts – Qantas earns revenue in many currencies and incurs costs especially fuel, maintenance and leasing in other countries. Swaps is another derivative used by Qantas which involves foreign currency denominated costs being paid out of revenue in the same currency. Qantas also denominates some borrowings in net surplus currencies to provide a natural hedge.
Methods of International Payment (Noventus Pty Ltd)
Payment in Advance – For its computing/electric products as it guarantees cash inflows. Noventus does this as it recently lost $10,000 in exporting products overseas without payment which had significant impact on its profitability management and liquidity which could have been used to repay debts.
There is no international legislation or body that regulates payment overseas.
Bill of exchange against payment – MIR-AUS is a company specialising in installation of ink systems for printers. They import a large amount of ink from overseas companies and therefore it can be risky if payment is sent before the quality of the ink is checked. When the business picks up the ink, a bill against payment is used so that MIR-AUS can inspect the ink delivered before accepting and paying for it.

Sorry, that was a bit excessive. But I hope this was of some help to you Good luck[/list][/list]

THANK YOU SOOO MUCH THAT WAS SUPER DUPER USEFUL! THANKS SOOO MUCH

[rodero]

Hey,

I have a slight feeling this question may have been asked before, but I can't seem to find it.

Why might a business choose to adopt LIFO in contrast to FIFO? The textbook explanation was confusing and didn't really help me. I mean yes, LIFO can be used for non-perishable goods, but what's the benefit of this?

Thanks in advance everyone 

[kiiaaa]

Hi all
i was wondering if anyone knew any good sites to get past papers for half yearlies. I school doesn't release that many
thank you in advance

[jamonwindeyer]

Hi all
i was wondering if anyone knew any good sites to get past papers for half yearlies. I school doesn't release that many
thank you in advance

Hey kiiaaa!! Pop "THSC" into Google, it should be the first result, a HEAP of past Trials and assessments for practically every subject! ☺

[kiiaaa]

Hey kiiaaa!! Pop "THSC" into Google, it should be the first result, a HEAP of past Trials and assessments for practically every subject! ☺

ah legend! thank you very much!

[diesxel]

Hello! Any good case studies for product positioning in the marketing dotpoint? I was thinking burberry..no frills..but i need others!


Thanks