HSC Business Studies Question Thread

[MisterNeo]

Hey there!

Would someone be able to explain how the answers to a gross profit ratio or expense ratio work? So, what I mean by that is, if I get a percentage of 30% using the gross profit ratio, does that imply that the business has made an improvement or is it a loss? I know that generally, if ratios are higher, it is considered better for a business but I'm stuck on this question on a past paper and the answers say that the gross profit has risen?

I'm working on the 2015 Business HSC paper - multiple choice questions 16 and 17 (connected question). I'm not sure if what I've written makes a lot of sense but I'm so confused aha. Some help would be greatly appreciated!

So with the formulas, you would have got 33% GPR for 2014 and a 50% GPR for 2015. A higher Gross Profit Ratio is an improvement because you get more gross profit compared to the value of sales, which indicates low COGS expenses.
The expenses in 2014 were 13% compared to 10% in 2015, which is an improvement because you use less expenses to achieve the value of sales.

[_____]

Which paper is this from? It could have been an error, or there is some bizarre trick to the wording of the question. 

It was some trial I got sent so the answer could be wrong. Thanks for looking at it though, if my working seems right to you it probably means that my answer's right 

Hey there!

Would someone be able to explain how the answers to a gross profit ratio or expense ratio work? So, what I mean by that is, if I get a percentage of 30% using the gross profit ratio, does that imply that the business has made an improvement or is it a loss? I know that generally, if ratios are higher, it is considered better for a business but I'm stuck on this question on a past paper and the answers say that the gross profit has risen?

I'm working on the 2015 Business HSC paper - multiple choice questions 16 and 17 (connected question). I'm not sure if what I've written makes a lot of sense but I'm so confused aha. Some help would be greatly appreciated!

To determine whether a ratio indicates a good result or not, we use comparative ratio analysis (syllabus term). So you compare it to a previous reading, the industry average or a competitor's result. Higher reading indicates improvement for the gross profit ratio but not for the expense ratio (make sure you revise them). My notes say a GPR of 40% is good but generally the papers will get you to compare to a given figure or one you must calculate.

Looking at the 2015 paper, in 2014 the GPR is (50/150) = 0.333333... and the ER is (20/150) = 0.133333...

In 2015 the GPR is (100/200) = 0.5 and the ER is (20/200) = 0.1. Therefore, by comparative ratio analysis the GPR has increased (improvement) and the ER has decreased (also an improvement - lower is better for the expense ratio).

[gkim1]

So with the formulas, you would have got 33% GPR for 2014 and a 50% GPR for 2015. A higher Gross Profit Ratio is an improvement because you get more gross profit compared to the value of sales, which indicates low COGS expenses.
The expenses in 2014 were 13% compared to 10% in 2015, which is an improvement because you use less expenses to achieve the value of sales.

Ohhhh that makes so much more sense now! Thank you so much!

It was some trial I got sent so the answer could be wrong. Thanks for looking at it though, if my working seems right to you it probably means that my answer's right 

To determine whether a ratio indicates a good result or not, we use comparative ratio analysis (syllabus term). So you compare it to a previous reading, the industry average or a competitor's result. Higher reading indicates improvement for the gross profit ratio but not for the expense ratio (make sure you revise them). My notes say a GPR of 40% is good but generally the papers will get you to compare to a given figure or one you must calculate.

Looking at the 2015 paper, in 2014 the GPR is (50/150) = 0.333333... and the ER is (20/150) = 0.133333...

In 2015 the GPR is (100/200) = 0.5 and the ER is (20/200) = 0.1. Therefore, by comparative ratio analysis the GPR has increased (improvement) and the ER has decreased (also an improvement - lower is better for the expense ratio).

Thank you so much for your help - makes a lot of sense now haha

Mod Edit: Merged posts

[studyharddd]

Hey x

Does anyone know a good way of remembering the difference between LIFO, FIFO and JIT? Get hella tripped out by it. Also provide an example of each please.

[EEEEEEP]

Hey x

Does anyone know a good way of remembering the difference between LIFO, FIFO and JIT? Get hella tripped out by it. Also provide an example of each please.

LIFO - last in first out, as the name suggests, the stocks that is received last , is sold first,...
e.g. If a store has inventory from last season and this season, this seasons stock would be sold first.

FIFO - first stock in, first stock out / sold
E.g. Think of a phone store, usually the first stock in is sold (especially if its a new modeL)

JIT - Just in time -  goods are created or received only when needed.
E.g. Think of a clothes store, sometimes they say things are out of stock as they only order it when people want it.

[Juliesokha]

Hi,
If the question is asking you about the monitoring and controlling process of the financial management, then you will need to talk about how they construct cash flow statements, income statements and balance sheet right? or there are more to consider in this dot point? (please tell me about it if there are more to consider)

And this question appeared in my trail and i was explaining all the three statements and how they help the businesses and obviously I exceeded the lines that were given and my teacher told me that i was wasting my time on that question as she said i could have just mentioned one statement or something, so I just wanna know can i not talk about everything when it comes to that kind of question? Same goes to extended response, if they ask you about financial management strategies and for example, i want to write about cash flow management and working capital management and there are lots of dash points underneath each of them. So, DO I NEED TO TALK ABOUT EVERYTHING or what? because USUALLY I WRITE ABOUT EVERYTHING AND END UP NOT HAVING ENOUGH TIME. Thank you

[fantasticbeasts3]

Hi,
If the question is asking you about the monitoring and controlling process of the financial management, then you will need to talk about how they construct cash flow statements, income statements and balance sheet right? or there are more to consider in this dot point? (please tell me about it if there are more to consider)

And this question appeared in my trial and i was explaining all the three statements and how they help the businesses and obviously I exceeded the lines that were given and my teacher told me that i was wasting my time on that question as she said i could have just mentioned one statement or something, so I just wanna know can i not talk about everything when it comes to that kind of question? Same goes to extended response, if they ask you about financial management strategies and for example, i want to write about cash flow management and working capital management and there are lots of dash points underneath each of them. So, DO I NEED TO TALK ABOUT EVERYTHING or what? because USUALLY I WRITE ABOUT EVERYTHING AND END UP NOT HAVING ENOUGH TIME. Thank you

hello!! thanks for keeping the business question thread alive hahahah

yep. if it's a short answer question, talk about all three monitoring and controlling things; define, explain how they all help, etc but if you feel like you're spending far too much time on a question, stop, because you probably are. i would talk about all, but make sure it's as concise as possible, and you're not spending too much time on it in proportion to other questions. i don't think it's likely they'll ask such a general question in the short answers though, because most hsc papers i've done only ask for interpretation of the financial statements, maybe in the essay they might ask about financial management processes.

you mentioned writing an essay on financial management strategies - lately they've been combining the effectiveness of strategies in responding to influences. make sure what you're talking about is relevant to the question. if the question asks you to talk about the effectiveness of financial management strategies, no, you don't have to talk about all of them (there's so many anyways!). choose the ones you can go into detail the most; the ones you can back up the best with case studies.

[Juliesokha]

Hii, thank you so much!

First of all, I apologise for having sooo many questions to ask but I just want to pass my hsc! 

Okay so, for the 2016 extended response it says 'evaluate the response of operations management to external influences' and by saying 'response' do they mean, strategies? like how does the operations function response to its external influences by using some of its strategies? Thannnkkkk you

[fantasticbeasts3]

Hii, thank you so much!

First of all, I apologise for having sooo many questions to ask but I just want to pass my hsc! 

Okay so, for the 2016 extended response it says 'evaluate the response of operations management to external influences' and by saying 'response' do they mean, strategies? like how does the operations function response to its external influences by using some of its strategies? Thannnkkkk you

hey, no worries! your questions help me, and everyone else on here. yea, you're right about that - the response of operations management is the strategies :-)

[kiiaaa]

hi, guys,
I got this question saying
Describe the factors that should be considered in the acquisition of new suitable stuff
I'm really confused on what these factors are and were wondering if you could please explain it to me?

Thank you

[hansolo9]

Hey guys

I’m still struggling with the idea of derivatives and all this stuff on swap/future contracts. Is it a form of hedging? Could you explain how it works using an example? Thanks

[fantasticbeasts3]

i'm so sorry guys, i was going to answer these a lot earlier - i saw these on my phone and was going to get around to them, but forgot!

hi, guys,
I got this question saying
Describe the factors that should be considered in the acquisition of new suitable stuff
I'm really confused on what these factors are and were wondering if you could please explain it to me?

Thank you

omg i stared at that question for a solid 2 minutes wondering what you were asking about... like stuff? i thought you were referring to stock, but turns out it's actually staff 😂

in my notes, i don't actually have the word "factors" under the acquisition dot point, but when a business wants to employ new staff, they've got to look at what job they're trying to fill, and the purpose of having new employees. this could include: preventing high rates of turnover, succession planning, acquiring employees within the budget and the whole recruitment process. you could also look at acquisition internally or externally (kinda self-explanatory so i'm not going to go into it), where internally, you'd look at how a potential candidate contributes to business goals and culture, improved customer service or quality, demand for specific skills; and externally, economic conditions, competition, technology; legal, political and social factors.

i hope this answers your question - best of luck with your hsc,
fantasticbeasts

Hey guys

I’m still struggling with the idea of derivatives and all this stuff on swap/future contracts. Is it a form of hedging? Could you explain how it works using an example? Thanks

opengangs does an amazing explanation of hedging and derivatives here!

it doesn't include swap and future contracts, so i'll quickly define them here:
swap contracts are where two businesses to use one currency on a particular day at the spot rate (a rate on one specific day). e.g. if an australian business has a shortage of cash (in aud currency), it can pay a US business in euros at the spot rate. Then in a future specified rate, US and australian businesses swap the euros for usd at the spot rate.
future contracts are almost the same thing as swap contracts, but the exchange rate is decided for a future date. this just reduces the chance of sudden fluctuations - so minimises financial risk for both businesses.

best of luck for your hsc,
fantasticbeasts

[sarahhamilton]

Any predictions for the 2017 paper?

[HSCNewcastle2017]

Any predictions for the 2017 paper?

Maybe marketing for the extended response? They haven't for a while.

[GraceR99]

Is it okay to only use one case study in the extended response? I would use IKEA if it was ok - thoughts or suggestions? Thanks.