trial higher school certificate examination business …

1

Student Number

Business Studies General Instructions

• Reading time – 5 minutes

• Working time – 3 hours

• Write using black or blue pen

• Draw diagrams using pencil

• Use the multiple-choice answer sheet

provided

• Write your Student Number at the top of

this page and the multiple-choice answer

sheet

Total marks – 100

Section I Pages 2-8

20 marks

Part A – 20 marks

• Attempt Questions 1-20

• Allow about 35 minutes for this part

Section II Page 9-17

40 marks

• Attempt Questions 21-24

• Allow about 1 hour and 15 minutes for this

part

Section III 8

20 marks

• Attempt Question 25

• Allow about 35 minutes for this section

Section IV Page 19

20 marks

• Attempt Questions 26 or 27

• Allow about 35 minutes for this section

2017 TRIAL HIGHER SCHOOL CERTIFICATE

EXAMINATION

Directions to School or College To ensure integrity and security, examination papers must NOT be removed from the examination room. Examination papers may not be returned to students till August 21st 2017. These examination papers are supplied Copyright Free, as such the purchaser may

photocopy and/or make changes for educational purposes within the confines of the School or college.

All care has been taken to ensure that this examination paper is error free and that it follows the style, format and material content of the High School Certificate Examination in accordance with the Board of Studies requirements. No guarantee or warranty is made or

implied that this examination paper mirrors in every respect the actual HSC Examination paper for this course.

2

Section I

20 marks

Attempt Questions 1-20

Allow about 35 minutes for this section

Use the multiple-choice answer sheet provided for Questions 1-20.

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1. Which of the following is an example of a non - current asset?

(A) Net Profit

(B) Goodwill

(C) Accounts receivable

(D) Mortgage

2. Moo Moo’s has changed the packaging of their milk bottles to maintain freshness of their

products longer and to make them easier for customers to handle. The marketing strategy

that Moo Moo’s has changed is:

(A) Positioning

(B) Physical Evidence

(C) Product

(D) Promotion

3. A smart phone manufacturer has found that raw material prices are rising and dispute

levels have fallen in their factories.

How would these factors be classified in a SWOT analysis?

(A) Weaknesses and strengths respectively

(B) Weaknesses and opportunities respectively

(C) Threats and strengths respectively

(D) Threats and opportunities respectively

3

4. What is a temporary solution to a cash flow crisis for a business?

(A) Lowering the business’ bank overdraft

(B) Organising a forward contract

(C) A new issue of shares

(D) Factoring

5. Which of the following is used in transformation processes?

(A) Inputs

(B) Sequencing and scheduling

(C) Customer service

(D) Warranties

6. The table below shows the price cafés in a local shopping centre charges charge for

medium sized milkshakes.

Café A Café B Café C Café D

$3.00 $3.50 $3.50 $4.00

Which pricing strategy applies to the above cafes?

(A) Café A is using penetration pricing and Café D is using price skimming

(B) Café A is using price skimming and Café D is using penetration pricing

(C) Café B and Café C are using competition based pricing

(D) All four cafes are using market based pricing

4

7. Below is selected financial information for a business.

Current Assets $25 000

Non - Current Liabilities $20 000

Owner’s Equity $65 000

Non - Current Assets $75 000

The Current/Working Capital Ratio for this business is:

(A) 0.6:1

(B) 1.2:1

(C) 1.7:1

(D) 2:1

8. An appropriate strategy that could be used to improve the financial performance of this

business would be:

(A) Liquidate all current assets and increase investment in non - current assets

(B) Sell some non - current assets to increase liquidity levels

(C) The owner should increase drawings

(D) Adopt a more relaxed credit policy

9. The advantage of customising products according to consumer tastes is:

(A) Customisation enables mass production to be carried out

(B) Supply chain management is less complex

(C) Businesses can achieve higher levels of customer satisfaction

(D) Businesses can achieve economies of scale

5

10. Tina conducts Yoga classes for pre – school children aged 3 – 5 years.

What market segment does Tina’s businesses produce goods and services for?

(A) Intermediate market

(B) Segmented market

(C) Mass market

(D) Niche market

11. Nina wishes to buy the local convenience store. The financial document that would

provide Nina with the best indicator of the convenience stores’ profitability in relation to

its turnover would be:

(A) The balance sheet

(B) The cash flow statement

(C) The income statement

(D) The accounting equation

12. A national department store has recently signed an agreement with Posh Perfumes to be

the only stockist of their range of perfumes.

The channel choice being used by Posh Perfumes is:

(A) Market segmentation

(B) Producer → Retailer → Customer

(C) Selective distribution

(D) Exclusive distribution

6

13. Supertyres Pty Ltd needs to raise finance quickly to fund the expansion of their car tyre

chain throughout Australia.

The type of equity finance most appropriate for Supertyres Pty Ltd to use would be:

(A) An overdraft obtained from their local bank

(B) A new share issue on the Australian Securities Exchange

(C) Drawings made by the owners of Supertyres Pty Ltd

(D) Retained profits from Supertyres Pty Ltd

14. A marketing manager of a soft drink company conducts a SWOT analysis to determine

which stage of the product lifecycle his various beverages are currently in.

Which of the following describes the stage of the marketing process the marketing

manager is working on?

(A) Situational analysis

(B) Market research

(C) Developing marketing strategies

(D) Monitoring and controlling the marketing plan

15. Which organisation is responsible for reducing fraud and unfair practices in financial

markets and financial products?

(A) Department of Fair Trading

(B) Australian Securities Exchange

(C) Australian Securities and Investment Commission

(D) Australian Competition and Consumer Commission

7

16. Below is financial information for a business ABC.

Net loss $60 000

Capital $95 000

Drawings $25 000

The value of Owner’s Equity for ABC is:

(A) $10 000

(B) $15 000

(C) $130 000

(D) $170 000

17. A large supermarket chain negotiates checkout operators’ wages and working conditions

collectively with the assistance of their employees’ trade union.

The type of employment contract resulting from these negotiations would be?

(A) Minimum wages and working conditions

(B) A Modern Award

(C) An enterprise agreement

(D) An individual contract

18. Which of the following government laws ensures that all Australians are able to request

flexible working arrangements?

(A) Work Health and Safety Act 2011

(B) Fair Work Act 2009

(C) Sex Discrimination Act 1984

(D) Equal Employment Opportunity Act 1987

8

19. Which of the following indicates poor human resource management?

(A) Greater staff retention

(B) Decreased use of grievance procedures

(C) Higher staff turnover

(D) Less workplace accidents

20. Below is cash flow information for a business.

Dividends received $5 000

Opening balance at 1 August $60 000

Wages paid $25 000

Receipts from debtors $5 000

Payments to creditors $30 000

Purchases of stock $25 000

Cash sales $30 000

The closing balance at the end of August is:

(A) $15 000

(B) $20 000

(C) $65 000

(D) $70 000

9

Section II

40 marks


Allow about 1 hour and 15 minutes for this part

Answer the questions in the spaces provided. These spaces provide guidance for the expected

length of response.

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Question 21 (11 Marks) Marks

Financial information for Wizard Electricals Pty Ltd

30 June 2016

Sales

Cost Of Goods Sold (COGS)

Gross Profit

$140 000

$80 000

Operating Expenses

Wages

Interest

Insurance

Rent

Advertising

15 000

10 000

2 000

12 000

3 000

Net Profit

Additional financial information:

Accounts Receivables for 2016 = $25 000

Industry Average Net Profit Ratio for 2016 = 20% or 0.2:1

Question 21 continues on page 10

10

Question 21 continued Marks

(A) What is the name the financial statement shown for Wizard Electronics? 1

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(B) Describe ONE ethical issue related to financial reports. 2

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(C) Calculate and comment on the Net Profit Ratio for Wizard Electronics. 2

Round off your answer to 2 decimal places.

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(D) Calculate and comment on the Accounts Receivable Turnover Ratio for 2

Wizard Electronics. Round off your answer to 2 decimal places.

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11


(E) Recommend ONE revenue and ONE cost control strategy Wizard Electronics 4

could use to improve their profitability.

Revenue control strategy:

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Cost control strategy:

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End of Question 21

12


(a) Define National Employment Standards (NES). 1

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(b) Explain the advantages of using an Enterprise Agreement as an employment 3

contract rather than a Modern Award.

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13


(c) With reference to a business you have studied, analyse the causes of a 6

workplace dispute and the strategies used to resolve it.

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End of Question 22

14


Oz Health Foods is a producer of a range of quality high protein, low fat energy bars. Oz Health

Food’s sales in Australia have stabilised over the past few years so the business is planning to

launch its products overseas.

(a) State TWO marketing objectives for Oz Health Foods. 2

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(b) Explain TWO factors influencing customer choice of Oz Health Foods’ energy 4

bars.

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15


(c) Recommend TWO global marketing strategies Oz Health Foods could use to 4

market their products overseas.

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End of Question 23

16


Hipster Clothing is a manufacturer of clothing for youths. It has a factory located in NSW.

(a) Distinguish between transformed resources and transforming resources. 3

Provide an example of each for Hipster Clothing.

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(b) Describe an appropriate plant layout for Hipster Clothing’s factory. 2

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17


(c) Choose TWO performance objectives and explain their importance to 4

Hipster Clothing.

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End of Question 24

18

Section III

20 marks

Attempt Question 25


Answer the question in a SEPARATE writing booklet. Extra writing booklets are available.

In your answer you will be assessed on how well you:

• demonstrate knowledge and understanding relevant to the question

• apply the hypothetical business situation

• communicate using relevant terminology and concepts

• present a sustained, logical and cohesive response in the form of a business report

Question 25 (20 marks)

You have been employed as a consultant to prepare a report for management of Speedyfood Ltd.

In your report:

• Explain the balance between cost and quality in Speedyfood Ltd operations strategy.

• Analyse TWO influences on the human resources function of Speedyfood Ltd.

• Recommend THREE human resources strategies Speedyfood Ltd could use to address

their issues.

Please turn over

Speedyfood Ltd is a fast food chain of restaurants employing 8000 people in

Australia. Speedyfood Ltd is currently facing intense competition in the fast food

industry and has experienced difficulties retaining even its loyal customers.

Management at Speedyfood restaurants have decided to introduce longer shifts in

their restaurants and reduce the size of their workforce to cut costs. This decision

has caused dissatisfaction among employees and their trade union resulting in

industrial action. The union argues that Speedyfood restaurants are already

understaffed and employees overworked. This is seen by higher high levels of staff

turnover, an increase in workplace accidents and more customer complaints

concerning the poor quality of meals

19

Section IV

20 marks

Attempt either Question 26 or 27


Answer the questions in a SEPARATE writing booklet. Extra writing booklets are available.

_____________________________________________________________________

In your answer you will be assessed on how well you:

• demonstrate knowledge and understanding relevant to the question

• use relevant business case study/studies and contemporary business issues

• communicate using relevant business terminology and concepts

• present a sustained, logical and cohesive response


Evaluate the marketing strategies for a good or service.

OR


Evaluate the financial performance of a business and recommend appropriate alternative

strategies to improve business performance.

End of Paper

20

Student Number

Section I: Answer Sheet

20 marks



Select the alternative A, B, C, or D that best answers the question and circle your answer.

Question

1 A B C D

2 A B C D

3 A B C D

4 A B C D

5 A B C D

6 A B C D

7 A B C D

8 A B C D

9 A B C D

10 A B C D

11 A B C D

12 A B C D

13 A B C D

14 A B C D

15 A B C D

16 A B C D

17 A B C D

18 A B C D

19 A B C D

20 A B C D

21

Section I - Criteria/Answers

20 marks



Outcome Question

H9 1 A B C D

H5 2 A B C D

H8 3 A B C D

H2 4 A B C D

H4 5 A B C D

H5 6 A B C D

H10 7 A B C D

H5 8 A B C D

H2 9 A B C D

H4 10 A B C D

H9 11 A B C D

H5 12 A B C D

H2 13 A B C D

H2 14 A B C D

H2 15 A B C D

H10 16 A B C D

H5 17 A B C D

H2 18 A B C D

H6 19 A B C D

H10 20 A B C D

22

Section II: Criteria/Answers


(a) What is the name the financial statement shown for Wizard Electronics?

Outcome: H9.

Criteria Marks

Correctly states the name the financial statement shown for Gifts Galore Pty Ltd. 1

Answer:

• Income Statement

(b) Describe ONE ethical issue related to financial reports.

Outcome: H7.

Criteria Marks

Provide characteristics and features of ONE ethical issue related to financial

reports.

2

Sketches in general terms ONE ethical issue related to financial reports. 1

Answer:

• Audited Accounts

• Inappropriate Cut - Off Periods

• Misuse of Funds

(c) Calculate and comment on the Net Profit Ratio for Wizard Electronics. Round off your

answer to 2 decimal places.

Outcome: H10.

Criteria Marks

Correctly calculates and comments on the Net Profit Ratio for Wizard Electronics. 2

Correctly calculates or sketches in general terms the Net Profit Ratio

for Wizard Electronics.

1

23

Answer:

• Net Profit Ratio/Sales = $18 000/$140 000 = 0.13:1 or 12.86%.

(d) Calculate and comment on the Accounts Receivable Turnover Ratio for

Wizard Electronics. Round off your answer to 2 decimal places.

Outcome: H10.

Criteria Marks

Correctly calculates and comments on the Accounts Receivable Turnover Ratio for

Wizard Electronics.

2

Correctly calculates Accounts Receivable Turnover Ratio or sketches in general

terms the Accounts Receivable Turnover for Wizard Electronics.

1

Answer:

• Accounts Receivable (AR) Turnover Ratio: Sales/AR = $140 000/$25 000 = 5.6 = 365/5.6

= 65 days or 65.18 days.

(e) Recommend ONE revenue and ONE cost control strategy Wizard Electronics could use to

improve their profitability.

Outcome: H5.

Criteria Marks

Provides a reason in favour of ONE revenue and ONE cost control strategy

Wizard Electronics could use to improve their profitability.

3 - 4

Provides characteristics and features of ONE revenue and ONE cost control

strategy Wizard Electronics could use to improve their profitability.

1 - 2

Answer:

• Revenue control strategy: setting marketing objectives, expanding the product mix, changing pricing

strategy.

• Cost control strategy: fixed and variable, cost centres, expense minimization

24


(a) Define National Employment Standards (NES). 1

Outcome: H9.

Criteria Marks

Correctly defines National Employment Standards (NES). 1

Answer:

• National Employment Standards (NES): the minimum working conditions provided to all

Australian workers eg. Maximum hours of work, leave entitlements etc.

(b) Explain the advantages of using an Enterprise Agreement as an employment contract

rather than a Modern Award.

Outcome: H2.

Criteria Marks

Comprehensively relates the cause and effect of using an Enterprise Agreement

as an employment contract rather than a Modern Award. 2 - 3

Gives characteristics and features of an Enterprise Agreement or a Modern Award. 1

Answer:

• Enterprise Agreement provides the employer with greater flexibility and the opportunity to

provide above Award wages and working conditions – this enables employers to attract and

retained more skilled staff.

• Employees and their union can be involved in the bargaining process therefore they are

more likely to be satisfied with the outcome of an Enterprise Agreement.

25

(c) With reference to a business you have studied, analyse the causes of a workplace dispute and

the strategies used to resolve it.

Outcome: H2.

Criteria Marks

Using a business case study, clearly relates the causes and implications of a

workplace dispute.

5 – 6

May or may not use a case study to provide the characteristics and features

of the causes and implications of a workplace dispute.

3 - 4

Sketches in general terms a workplace dispute 1- 2

Answer:

• Causes of workplace disputes: wage demands, working conditions, changes to

managerial policy, political and social reasons (eg. Closure of the industry).

• Strategies: negotiation, mediation, conciliation and arbitration.


(a) State TWO marketing objectives for Oz Health Foods.

Outcome: H4.

Criteria Marks

Correctly states TWO marketing objectives for Oz Health Foods. 2

Correctly states ONE marketing objective for Oz Health Foods. 1

Answer:

• Increase market share

• Market expansion

• Increase sales

• Increased customer service

• Product extension

• Increase customer loyalty

26

(b) Explain TWO factors influencing customer choice of Oz Health Foods’ energy bars.

Outcome: H2.

Comprehensively relates the cause and effect of TWO factors influencing

customer choice of Oz Health Foods energy bars. 3 - 4

Gives characteristics and features of TWO factors influencing customer choice

of Oz Health Foods energy bars. 1 - 2

Answer:

• Factors influencing customer choice – psychological (perception that their energy bars are

healthy and increase energy levels), sociocultural (increased demand for healthy products due

to social consciousness), economic (“luxury” good rather than a necessity so there will be

reduced demand for these bars in a recession as consumers tend to buy necessities),

government (GST levels placed on energy bars).

(c) Recommend TWO global marketing strategies Oz Health Foods could use to market their

products overseas.

Outcome: H5.

Criteria Marks

Provides reasons in favour of TWO global marketing strategies Oz Health Foods

could use to market their products overseas.

3 - 4

Provides characteristics and features of TWO global marketing strategies Oz Health

Foods could use to market their products overseas.

1 - 2

27

Answer:

• Global marketing strategies:

– global branding (the use of a logo representing health benefits gained by consuming

energy bars)

– standardization (as the way the product is used is the same across markets and would

enable Oz Health Foods to achieve economies of scale in production)

– customization (could customize ingredients to overseas markets)

– global pricing (either standardize or customize according to market conditions)

– competitive positioning (superior image due to their energy bars being vegan and

organic)


(a) Distinguish between transformed resources and transforming resources. Provide an example of

each for Hipster Clothing.

Outcome: H9.

Makes a clear distinction between transformed resources and transforming

Resources and provides an example of each for Hipster Clothing. 2 - 3

Sketches in general terms transformed resources and transforming

resources. 1

Answer:

• Transformed resources: are those inputs that are changed or converted in the operations

process; they are transformed by the operations processes eg. Cotton, buttons, zippers,

labels, electricity used in factory.

• Transforming resources: act on the inputs to change them and are not used up in

operations eg. Machinery used to manufacture clothes, factory, labour used to design and

make jeans.

28

(b) Describe an appropriate plant layout for Hipster Clothing’s factory.

Outcome: H4.

Criteria Marks

Provide characteristics and features of an appropriate plant layout for Hipster

Clothing’s factory.

2

Sketches in general terms an appropriate plant layout for Hipster Clothing’s factory. 1

Answer:

• Process layout: where machines and equipment are grouped together by the function (or

process) they perform. i.e. considering the best way to organise the workflow of the

business. The process layout is sometimes called functional layout eg. All cutting out of

fabric occurs in one area of the clothing factory and all labels attached to clothing in another

area.

• Product layout: where the equipment arrangement relates to the sequence of tasks

performed in manufacturing a product eg. Shirts manufactured in one part of the clothing

factory and pants manufactured in another.

29

(c) Choose TWO performance objectives and explain their importance to Hipster Clothing.

Outcome: H5.

Criteria Marks

Comprehensively relates the cause and effect of TWO performance objectives to

Hipster Clothing. 3 - 4

Gives characteristics and features of TWO performance objectives for Hipster

Clothing. 1 - 2

Answer:

• Speed (shorten production times for clothing to lead times and production costs).

• Quality (use quality management to improve clothing quality – enables a higher price to

be charged and maximisation of profits).

• Dependability (clothing quality consistent with branding/image of Hipster Clothing).

• Flexibility (Hipster Clothing able to adjust clothing production levels due to seasonal

changes in demand eg. In winter produce more long pants whereas in summer produce

more shorts).

• Customisation (Hipster Clothing able to alter clothing designs to cater for youths in

different markets eg. Coastal and country areas).

• Cost (cost minimisation to maximise profits).

30

Section III: Question 25 (20 marks)

• Explain the balance between cost and quality in Speedyfood Ltd operations strategy.

• Analyse TWO influences on the human resources function of Speedyfood Ltd.

• Recommend THREE human resources strategies Speedyfood Ltd could use to address

their issues.

Outcomes: H2, H5, H8, H9.

Criteria Marks

• Comprehensive explanation of the balance between cost and quality in Speedyfood Ltd

operations strategy.

• Clearly relates the implications of TWO influences on the human resources function of

Speedyfood Ltd.

• Provides reasons in favour of THREE human resources strategies Speedyfood Ltd

could use to address their issues.

• Makes effective use of the information provided, demonstrating extensive knowledge

and understanding relevant to the question.

• Presents a sustained, logical and cohesive response in the form of a business report.

17-20

• Explains the balance between cost and quality in Speedyfood Ltd operations strategy.

• Makes evident the relationship of TWO influences on the human resources function of

Speedyfood Ltd.

• Provides a reason in favour of THREE human resources strategies Speedyfood Ltd

could use to address their issues.

• Makes some use of the information provided, demonstrating knowledge and

understanding of the question.

• Presents a well-organised response in the form of a business report.

13-16

• Describes the balance between cost and quality in Speedyfood Ltd operations strategy.

• Provides characteristics and features of TWO influences on the human resources

function of Speedyfood Ltd

• Recommends THREE human resources strategies for Speedyfood Ltd could use to

address their issues.

• Includes features of a business report and uses some business terminology and

concepts.

9-12

• May or may not identify the balance between cost and quality in Speedyfood Ltd

operations strategy.

• Sketches in general terms TWO influences on the human resources function of

Speedyfood Ltd.

• Recommends some human resources strategies for Speedyfood Ltd.

• May include some features of a business report and uses some basic business

terminology.

5-8

• Uses basic business terminology.

• May make reference to balance between cost and quality in Speedyfood Ltd operations

strategy, influences on the human resources functions or human resources strategies for

Speedyfood Ltd.

1-4

Answer:

31

Cost/Quality balance

• Cost reductions (fewer staff working in the restaurants) enable profit maximisation to be

achieved, but this may compromise product quality further especially if restaurants are

already short staffed and accidents have increased. Speedyfood is a fast food chain operating

in a competitive industry therefore they need to minimise costs to remain competitive. Lower

costs will free up money to be used for quality management.

• To achieve quality, quality management (TQM, assurance, control) may be expensive to

introduce in the short term (due to changing procedures, needing to retrain staff) however, this

may result in reduced waste, less accidents, less customer complaints and cost leadership

being achieved.

Key influences

• stakeholders – employers, employees, employer associations, unions, government

organisations, society

• legal – the current legal framework, the employment contract – common law (rights and

obligations of employers and employees), minimum employment standards, minimum wage

rates, awards, enterprise agreements, other employment contracts

• occupational health and safety and workers compensation

• antidiscrimination and equal employment opportunity

• economic

• technological

• social – changing work patterns, living standards

• ethics and corporate social responsibility

Strategies in human resource management

• leadership style

• job design – general or specific tasks

• recruitment – internal or external, general or specific skills

• training and development – current or future skills

• performance management – developmental or administrative

• rewards – monetary and non-monetary, individual or group, performance pay

• global – costs, skills, supply

• workplace disputes

– resolution – negotiation, mediation, grievance procedures, involvement of courts and

tribunals

Section IV: Question 26 (20 marks)

32

Evaluate the marketing strategies for a good or service.

Outcomes: H2, H5, H6, H7, H9.

Criteria Marks

• Presents a sustained, logical and cohesive response and communicates

clearly using relevant business terminology and concepts.

• Clearly makes a judgement; based on criteria and determines the value of

the marketing strategies for a good or service.

• Applies relevant case study/studies and contemporary business issues.

17-20

• Presents a logical and cohesive response using relevant terminology and

concepts.

• Makes evident the implications of the marketing strategies for a good or

service.

• Uses relevant case study/studies and contemporary business issues.

13-16

• Communicates using business terminology and concepts.

• Provides characteristics and features of the marketing strategies for a

good or service.

• Presents a response with some structure.

9-12

• Communicates using some business terminology and concepts.

• Makes some reference to the marketing strategies for a good or service.

• Presents a response with limited structure.

5-8

• Uses basic knowledge and terminology.

• May make reference to the marketing strategies for a good or service.

1-4

Answer:

33

Marketing strategies

• market segmentation, product/service differentiation and positioning

• products – goods and/or services

– branding

– packaging

• price including pricing methods – cost, market, competition-based

– pricing strategies – skimming, penetration, loss leaders, price points

– price and quality interaction

• promotion

– elements of the promotion mix – advertising, personal selling and relationship marketing,

sales promotions, publicity and public relations

– the communication process – opinion leaders, word of mouth

• place/distribution

– distribution channels

– channel choice – intensive, selective, exclusive

– physical distribution issues – transport, warehousing, inventory

• people, processes and physical evidence

• e-marketing

• global marketing

– global branding

– standardisation

– customisation

– global pricing

– competitive positioning

Section IV: Question 27 (20 marks)

34

Evaluate the financial performance of a business and recommend appropriate alternative


Outcomes: H2, H5, H6, H7, H9.

Criteria Marks

• Presents a sustained, logical and cohesive response and communicates clearly

using relevant business terminology and concepts.

• Clearly makes a judgement; based on criteria and determines the value of the of

financial management strategies used to improve the financial performance of a

business and recommends appropriate alternative strategies to improve business

performance.

• Applies relevant case study/studies and contemporary business issues.

17-20

• Presents a logical and cohesive response using relevant terminology and

concepts.

• Makes evident the implications of financial management strategies used to

improve the financial performance of a business and recommends appropriate

alternative strategies to improve business performance.

• Uses relevant case study/studies and contemporary business issues.

13-16

• Communicates using business terminology and concepts.

• Provides characteristics and features of financial management strategies used to

improve the financial performance of a business and may or may not recommend

appropriate alternative strategies to improve business performance.

• Presents a response with some structure.

9-12

• Communicates using some business terminology and concepts.

• Makes some reference to financial management strategies used to improve the

financial performance of a business or recommends appropriate alternative


• Presents a response with limited structure.

5-8

• Uses basic knowledge and terminology.

• May make reference to financial management strategies used to improve the

financial performance of a business or recommend strategies to improve business

performance.

1-4

Answer:

35

Role of financial management

• strategic role of financial management

• objectives of financial management

– profitability, growth, efficiency, liquidity, solvency

– short-term and long-term

Financial management strategies

• cash flow management

– cash flow statements

– distribution of payments, discounts for early payment, factoring

• working capital management

– control of current assets – cash, receivables, inventories

– control of current liabilities – payables, loans, overdrafts

– strategies – leasing, sale and lease back

• profitability management

– cost controls – fixed and variable, cost centres, expense minimisation

– revenue controls – marketing objectives

• global financial management

– exchange rates

– interest rates

– methods of international payment – payment in advance, letter of credit, clean payment,

bill of exchange

– hedging

– derivatives

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