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AQA Business Studies Unit 3 Thread - Thurs Jan 26th 2012

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Original post by destruction
Are these measured in minus numbers, though so in Elastic -1?


yepp, price elasticity is always a negative number, but you can ignore it, doesn't matter

ie. inelastic = -0.
unit elastic = -1
elastic = -1.
Reply 141
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0range
20
Original post by destruction
Couldn't that be that apple is more leaner than android or more efficient so their costs are lower than androids?


Most prob not, Google is a large company and know what they're doing, they wouldn't let there competition be more effiecient then them. It comes down to objectives and target market; apple targets rich people with high disposable income, google has a much larger target market and try to target mostly everyone. Also apple are price skimming, google on the other hand are mostly penetration pricing.
Original post by destruction
http://www.slideshare.net/petesammons first slide show is ratios

That is just profitability ones.

http://tutor2u.net/business/accounts/main_ratios.htm

Don't need to know the one under gearing "interest cover"


Thanks

Im kind of confused over stock turn over?

Lets say for a clothing retailer (during one year) the cost of sales= £137million and the stock= £64million

Inventory turn over= 2.14(approx)

does this mean that they sold 2.14 times the value of the stock in the year or did they sell 2.14 more then the stock held? :s-smilie:

so confused at this part
What do we think is coming up?? I hope there is no critical path lol :confused:
Okay I give up with ROCE, what is capital employed actually equal to?
Original post by 0range
Most prob not, Google is a large company and know what they're doing, they wouldn't let there competition be more effiecient then them. It comes down to objectives and target market; apple targets rich people with high disposable income, google has a much larger target market and try to target mostly everyone. Also apple are price skimming, google on the other hand are mostly penetration pricing.


someone had a question asking why Apple could be more profitable than Android even though they has less market share.

So it is a potential answer I gave. So I'm not wrong :smile:, plus the point of them being more leaner will only help with the margins and if their market segment is for a higher class it will only help with their profitability.

What is price skimming???
You mean they lower their price for market penetration?
Original post by dan_needs_help
Thanks

Im kind of confused over stock turn over?

Lets say for a clothing retailer (during one year) the cost of sales= £137million and the stock= £64million

Inventory turn over= 2.14(approx)

does this mean that they sold 2.14 times the value of the stock in the year or did they sell 2.14 more then the stock held? :s-smilie:

so confused at this part


It is the number of times they need to replenish their stock. If they were a fruit and veg you expect it to be high because it is perishable goods.

With a clothes shop you would expect it to be higher than 3 times because there is "fashion, taste", which means that after an amount of time they goods would of lost their value.

But the best way is to compare with Industry Norm, and Historical Data and if possible apply some common sense.

With stock turnover= costs of good sold/avg stock x (52weeks if want in weeks or x 365 for days)

Average stock = (closing+opening)/2
(edited 12 years ago)
Reply 147
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HP348
2
Can anbody give be some info on Asset Turnover - what is considered high?
Reply 148
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0range
20
Original post by destruction
someone had a question asking why Apple could be more profitable than Android even though they has less market share.

So it is a potential answer I gave. So I'm not wrong :smile:, plus the point of them being more leaner will only help with the margins and if their market segment is for a higher class it will only help with their profitability.

What is price skimming???
You mean they lower their price for market penetration?


If your object is market share you use price penetration
If your objective is profit you use price skimming (opposite to penetration, you charge really high prices)

I can see why people would say because they're leaner but that is only a textbook answer and just isn't right, android and apple are huge businesses and have been around a while the only way I realistically see them being leaner is if they had a patented new production method or something.
Original post by HP348
Can anbody give be some info on Asset Turnover - what is considered high?


That is a very good question, since using Historical data will not be accurate in this case because of an investment into net assets may not sure up on the revenue until the next year or even after.

The best way will most likely to compare with competitors.

http://tutor2u.net/business/accounts/ratio_asset_turnover.html

page explains it better
Original post by 0range
If your object is market share you use price penetration
If your objective is profit you use price skimming (opposite to penetration, you charge really high prices)

I can see why people would say because they're leaner but that is only a textbook answer and just isn't right, android and apple are huge businesses and have been around a while the only way I realistically see them being leaner is if they had a patented new production method or something.


You see capital employed can you use Total assets- Current liabilities?
http://www.youtube.com/watch?v=MNiEHvw6TTg&feature=related
Bit too much of economics. D:
Original post by wasuuuuuuuuuuuppp
yepp, price elasticity is always a negative number, but you can ignore it, doesn't matter

ie. inelastic = -0.
unit elastic = -1
elastic = -1.


Easier version :smile:



Value Descriptive Terms
Ed = 0 Perfectly inelastic demand
- 1 < Ed < 0 Inelastic or relatively inelastic demand
Ed = - 1 Unit elastic, unit elasticity, unitary elasticity, or unitarily elastic demand
- ∞ < Ed < - 1 Elastic or relatively elastic demand
Ed = - ∞ Perfectly elastic demand


if you understand maths and don't mind symbols
(edited 12 years ago)
Absolutely dreading this exam!!!! It is so hard to get everything in in the time period, whilst having to analyze, apply and evaluate at the same time!!

Impossible!
Reply 155
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Saf94
11
PED is basically just this:

Inelastic if 0<x<1
Elastic if x>1

I think that is right, correct me if i'm wrong
Also if x=1 then it is unit elastic, which means change in price is equal to change in demand
Reply 156
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HP348
2
My problems going to be concentrating i have an appalling concentration level especially in exams im reading the case study whilst getting distracted.
Its bad that the average attention spam is 20 minutes yet this exam and hour and 3/4 in which theres is really no time to even take your pen off never mind stop and organise your thoughts.
80 marks in 105 minutes
so you should have around 25 minutes to plan or read

but honestly I think we all will waffle a bit so 20 minutes to read and plan the case study and do the 34-36 mark
Is CPA likely to come up? :/
Reply 159
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husn
8
Original post by Lakhvir.Singh
Is CPA likely to come up? :/


I'm not too sure however i heard someone say its a high chance as its never come before but it has in actual fact come before i think the June 10 paper- so that gives me a slight bit of relief!
but I would still revise it and try to understand it as best as u can - cuz u never knw what these mean examiners may chuck in ::mad:

and btw thanks for the rev. notes once agen - i havent used them yet but im sure they will be of much help when i revise tonite : :smile:

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