Note AcademyNote Academy
Start

Business Studies · May / June 2021 · Paper 22 · Question 3

0450

As printed in the paper

Show the answer and mark scheme

  • 3(a)[8]

    Explain two reasons why the cash-flow forecast in Appendix 3 is important to TT. Award 1 mark for each relevant reason (maximum 2). Award a maximum of 3 additional marks for each explanation of the reason why the cash-flow forecast is important to TT – one of which must be applied to this context. Relevant reasons might include:

    To see if there is a cash flow problem / liquidity problem – if so, he needs to organise an overdraft – the cash-flow forecast will help support Tandeep persuading the bank to give an overdraft / bank loan. (Other ways of solving a cash flow problem might be given, e.g. apply for trade credit)
    To see if there is sufficient cash / working capital to pay day-to-day costs – so, TT can pay expenses – without the need for additional working capital
    Whether the company is holding too much cash – perhaps there may be better uses of the cash – that may yield a greater return on the capital
    May help with decisions/planning about when to purchase assets/equipment/inventory
    Help to sell shares to new investors
    Can be used to compare financial performance, against actual performance over time (e.g. sales)
    Can be used to help apply for a bank loan For example: Tandeep may use the cash-flow forecast to take to the bank to support the application for an overdraft (1)

    as in the first month of trading he will need to borrow $200 to keep trading (app). This will allow TT to make a successful start even though Tandeep does not have sufficient funds to start with (1)

    but TT will quickly be able to pay the overdraft back in the following month (1). Application might include: toys, nursery, toy shop, toy manufacturer, shop manager, 5 sales assistants, administration tasks, information from Appendix 3 cash-flow forecast.

  • 3(b)[12]

    Consider how a job description, job specification and the shortlist of candidates will be helpful in the recruitment process for TT. Which is the most important stage to ensure Tandeep recruits the best person to be a manager at TT? Justify your answer. Level Description Sound application of knowledge and understanding of relevant business concepts using appropriate terminology. Detailed discussion of two or more stages of the recruitment process. Well-justified conclusion. Candidates discussing all three stages in detail, in context and with a well-justified conclusion including why the other stages were less important should be rewarded with the top marks in the band. 9–12 Sound application of knowledge and understanding of relevant business concepts using appropriate terminology. Detailed discussion of at least one stage. Judgement with some justification / some evaluation of choices made. Candidates discussing two or more stages in detail and applying it to the case should be rewarded with the top marks in the band. 5–8 Limited application of knowledge and understanding of relevant business concepts. Limited ability to discuss these stages with little/no explanation. Simple judgement with limited justification / limited evaluation of choices made. Candidates outlining all three stages in context should be rewarded with the top marks in the band. 1–4 No creditable response. Relevant points might include: Job description

    Outlines the duties of the job – sets out clearly what the toy shop manager will be expected to do – more likely to get suitable applicants as they will know what is required of them and if they will be able to carry out the necessary tasks
    Makes it clear what the applicant should be able to do – if they cannot do these tasks necessary to manage the toy shop then they should not apply for the job
    Helps to ensure only suitable people apply for the job as they are clear about the roles and responsibilities of the position Job specification
    Makes it clear what qualifications, experience and skills are required for the job
    Makes it easier for Tandeep to decide between candidates as to who may be most suitable for the manager of the toy shop – as qualifications, skills, personal qualities and experience are listed
    Easier for candidates to see if they could do the job and therefore decide whether to apply for the job – people without the necessary qualifications should not apply – less time is wasted reading through applications that are not suitable
    Easier when shortlisting applicants for interview to select the most suitable people Shortlisting
    Selects the most suitable applicants to interview so less time wasted with unsuitable people for the job of manager of the toy shop
    May use references to help shortlist applicants to remove unsuitable people even though the application form may make the person seem most suitable Conclusion
    A job description makes it clear what the job requires and therefore it is easier for Tandeep to know what tasks in the toy shop he wants the applicant to be able to do. It is no good shortlisting unsuitable applicants and the job specification only lists skills and qualifications but does not give details of the job of manager of the toy shop. Therefore, a job description is the most important
    A job specification is most important as it makes it clear what qualifications, experience and skills are required to be the manager of the toy shop. Without this an unsuitable person may be recruited and someone without the necessary experience could not do the job
    Without shortlisting Tandeep could waste a lot of time interviewing unsuitable applicants for the job of manager when they may not know anything about toy shops
Practise this paper →

Make a free account to save your answers and see your weak topics and ask the AI why a wrong answer is wrong.