Section II - Questions 21-25 (1 Viewer)

goan_crazy

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So how did all we find the short answers?
Discuss
 

7th Sign

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some parts of it were pretty easy like the one about the guy with the kid,

the dress one was a bit sus, I thought about writing about getting a legal contract saying you could use the model in the pics...but i thought that would be to basic, So I talked about patterns of the dress and how the business needs to ask permission from the dree makers to use it in their advertisement, I recall some legal issues like this a while ago .....
 

vaniLLa_554

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what did you write about that efficiency ratio and impact on working capital
i thought it was worded a bit weird
 

sexyemiiily

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"the dress one was a bit sus, I thought about writing about getting a legal contract saying you could use the model in the pics...but i thought that would be to basic, So I talked about patterns of the dress and how the business needs to ask permission from the dree makers to use it in their advertisement, I recall some legal issues like this a while ago ...."


isnt the legal issue...like deceptive and misleading advertising? cause it was saying that if you bought the shoes you 'will' move like the model!?!
 

all_yello

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i left out a whole 6 marker.....didnt see it till after pens down :(

but otherwise it was alright....

with the dress question, whats a legal thing? like i think i wrote implied conditions, but im pretty sure thats wrong...
 

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sexyemiiily said:
"the dress one was a bit sus, I thought about writing about getting a legal contract saying you could use the model in the pics...but i thought that would be to basic, So I talked about patterns of the dress and how the business needs to ask permission from the dree makers to use it in their advertisement, I recall some legal issues like this a while ago ...."


isnt the legal issue...like deceptive and misleading advertising? cause it was saying that if you bought the shoes you 'will' move like the model!?!
yeh i put deceptive and misleading practices seemed the most likely
 

Danni07

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I said the the same thing sexyemiiily, false advertising or something. The working capital one was strange and confusing... umm... I think one of my strategies was like... benchmarking. And realising that your working capital wasn't up to scratch would effect it... coz you' try and get more...? meh I don't know about that one.
 

Rafy

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7th Sign said:
some parts of it were pretty easy like the one about the guy with the kid,

the dress one was a bit sus, I thought about writing about getting a legal contract saying you could use the model in the pics...but i thought that would be to basic, So I talked about patterns of the dress and how the business needs to ask permission from the dree makers to use it in their advertisement, I recall some legal issues like this a while ago .....

yeah i talked about the contract/permission for the model's image and name to appear in that advertisment.

Overall the short answer was okay. Definately a few blurry questions in there, but i feel that it was fair. I'm thinking i got around 35/40 for that section
 
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I thought the SA section was pretty good...I agree with vanilla about the efficiency/working capital question...but I think I'll probably get most of those marks...hopefully :)
 

sexyemiiily

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vaniLLa_554 said:
what did you write about that efficiency ratio and impact on working capital
i thought it was worded a bit weird
i talked about the two meausres of efficiency...expenses over sales and accounts receivable turnover...and said how if you minimises your expenses such as labour and substitute for capital you may have less working capital...but for accounts if u encourage them to pay on time using discount for early payment you would have increased working capital..
would that be right? :S
 

forceblade

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sexyemiiily said:
i talked about the two meausres of efficiency...expenses over sales and accounts receivable turnover...and said how if you minimises your expenses such as labour and substitute for capital you may have less working capital...but for accounts if u encourage them to pay on time using discount for early payment you would have increased working capital..
would that be right? :S
um i did it different to you, i said that if expense ratio would improve then working captial would also improve cause less example, and if expense ratio gets worse so does the working captial due to the increase expenses

then i said that accounts receivable wouldnt affect the working capital cause accounts recieveable is under the current assets section anyways so it doesnt really matter....

i so hope that i was right :(
 

7th Sign

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i think i stuffed up that ratio shit in the extenderd response part like 3/6 for it i think...I dont thing i wrote enoguh content...:(
 

strike

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efficiency ratio improves = greater net profit margin = greater cash flow = more cash in current assets = higher working capital.

accounts receivable turnover ratio = less turnovers = money lost on delinquent accounts and cash inflows would be coming in less often = working capital/cash flow problems.

factoring could be used to improve working capital in the short term if business is in trouble, but for medium-long term requires control of current assets and liabilities and reduced credit terms.
 

shortygb

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they were quite good overall i thnk ill get most of the marks there.

i just got stuck on this one question about working capital and efficeincy (i think thats what it was), did anyone else? and how did you answer that one?
 

hipPo3

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strike said:
efficiency ratio improves = greater net profit margin = greater cash flow = more cash in current assets = higher working capital
i would think that the reduction of current ratio = reduction in work capital. So i said that thier effieciecy went down as thier wrok capital ratio declined. The question was pretty wierd..
 

caligem

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lol, i sat there for 10 mins thinking bout that efficiency question and then wrote a one line definition of working capaital... but then i came back to it later and said the same as strike 4 account recievable, and i did the other one the opposite, ie. if it got worse, not improved, but its the same thing. i dont think the q specified better or worse, just 'changed'.

And for the dress one i said deceptive and misleading advertising, coz they were telling 8-12yr olds that if they bought the shoes they would be like the celebrity!

But i have a q... for the Vic and his kid, what is a legal aspect he'd have 2 consider b4 changing the working conditions? and wat would be the impact on Vic and the business? Man, i had no idea, i made it up, stuff about contracts, and fair pay, and if his working conditions changed, eg. he was allowed to work from home, he might be less productive/efficient coz he's watching the kid as well as working, which would impact negatively on him and the business... or sumthing like that....
 

jackcass2

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just a confirmation was that working capital ratio

current assests / current liabilities

there was a question like this in my trial but it asked net working capital and it was ca minus cl
 

goan_crazy

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jackcass2 said:
just a confirmation was that working capital ratio

current assests / current liabilities

there was a question like this in my trial but it asked net working capital and it was ca minus cl
yeah it is

in your trial that was just working capital...not teh ratio\


anyways about the exam:
the shoe ones=i put deceptive n misleading advertising

efficency n working capital is what i talked bout 2 that q

i talked about family friendly arrangements 4 vic
 

Logain

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Hey guys, the one you're stressing about threw me for a while was the one with two efficiency indicators. Obviously the only indicator they provided was the accounts recievable turnover ratio, and the expense ratio wasn't there. However, you could infer the fact that the expense ratio had risen based on the data that showed the GP ratio remaining stagnant while the NP and Return on OE had fallen.
 

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d3v1l_grl said:
i could only see one efficiency ratio and that was the accts receivables turnover one so when it says the changes in 2 efficiency ratios or whatever it threw me! i wrote that the decrease in the current ratio indicated a negative impact on working capital as it was only 1:1 therefore not leaving any left over for any sudden increases in expenses. i have no idea if its right or not though.
That, I reckon, would be acceptable. I know a few people at school did the same thing as you there. I personally did something with RonOE .. which seemed to work in the exam, but now that I think about it, I don't like it.

I also realise now that we could have possibly inferred that the other efficiency ratio (Operating Expenses Ratio) would have worsened, thus reducing working capital.

The reason is that GP Ratio stayed at 35%, while NP Ratio fell from 30 to 25 or whatever it was. But in any case, you can deduce that operating expenses rose (which was one of the earlier parts of that question, where you have to talk about getting new suppliers etc). So, if you know that operating expenses rose, and you know the value of net sales, you could then say that the Total Operating Expenses Ratio would have increased, pointing to less working capital.

Of course, that would be dependent on net sales being the same amount over the two years, and I cannot remember if it was or not.

jackcass2 said:
just a confirmation was that working capital ratio

current assests / current liabilities

there was a question like this in my trial but it asked net working capital and it was ca minus cl
Net Working Capital Ratio is the same as Current Ratio, so yes. Net Working Capital is CA - CL, as you said.
 

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