Sample exam question for Business Studies O-level Cambridge

Mirza is the Finance Director for a large public limited company called BSH. He sets thefinancial budgets for all the departments. Mirza is worried about the falling sales of BSH. He was looking at the data in Table 1. Table 1: Selected Financial Data from BSH ($000’s) 2008 2009 Sales 1200 1100 Net Profit 200 250 Capital employed 1000 1500 CurrBSHent Ratio 1.2 0.7 (a) What is meant by a financial budget? [2] (b) Calculate the net profit margin for BSH in 2009. [2] (c) Explain what the current ratio tells Mirza about BSH’s financial position. [4] (d) BSH wants to raise new funds in 2010 to help finance its growth plans. Identify and explain three ways it could do this. [6] (e) Do you think that the management of BSH should be worried about the performance ofthe company in 2009? Justify your answer. [6]