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HSC Business Studies Question Thread
Thankunext:
--- Quote from: Grace0702 on October 26, 2019, 10:03:45 pm ---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!
--- End quote ---
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:
--- Quote from: jelena_nina2001 on October 28, 2019, 11:37:15 am ---hey peeps how is the answer B? tysm x
--- End quote ---
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! ;D
jelena_nina2001:
--- Quote from: Grace0702 on October 28, 2019, 12:11:10 pm ---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! ;D
--- End quote ---
so just to clarify,how did you get to $21000?
Grace0702:
--- Quote from: jelena_nina2001 on October 28, 2019, 12:29:16 pm ---so just to clarify,how did you get to $21000?
--- End quote ---
$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
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