AQA BUSS 2 4th June Revision thread

I've read all about return on capital, but I just can't wrap my head around it! Is it a percentage of profit towards the business?

It's kind of a profit. You add the Return on Capital onto the original amount invested.

Formula: (Net Profit/Capital Invested) x 100
For example:

Net Profit = £20,000
Capital Invested = £100,000

(£20,000/£100,000) x 100

= 20%

So you would add 20% extra to the original amount invested.

Original amount = £100,000

20% of original amount = £20,000

Add them two together and then the Return on Capital would be, in total, £120,000

(edited 10 years ago)

Reply 221

sasunerd

1

Original post by samiya

It's the percentage of profit earned after investing in new capital :smile:

Oh, thank you! Also it doesn't necessarily have to be a predicted percentage of profit, right?

Original post by williamadkins

It's kind of a profit. You add the Return on Capital onto the original amount invested.

Formula: (Net Profit/Capital Invested) x 100
For example:

Net Profit = £20,000Capital Invested = £100,000

(£20,000/£100,000) x 100

= 20%

So you would add 20% extra to the original amount invested.

Original amount = £100,000

20% of original amount = £20,000

Add them two together and then the Return on Capital would be, in total, £120,000

If they ask you a question to work out the return on capital, you'd have to find out the total in the end?

(edited 10 years ago)

Reply 222

Tarmu

Evaluation prompters:-

Opinion
Time frames
It depends on
Comparison
Other factors

Reply 223

needtosucceed=)

10

Original post by Tarmu

Evaluation prompters:-

Opinion
Time frames
It depends on
Comparison
Other factors

exactly this ^

Reply 224

PrinceUpsb

14

Gross profit = sales revenue - costs of goods.
aka contribution per unit*number of units sold?

Net profit = sales revenue - costs of goods- fixed costs?

Are these correct?

Reply 225

smileyelzz

8

Original post by usernamelol

Not business studies specific, but does anybody know anything about the actual examining process? like is it just the one examiner we have mark our exam paper, or do they get checked by a few? just curious!

My business teacher's an examiner for AQA. She told us that each examiner specializes in a question that they mark, and they only mark that particular question. So for example, one examiner will have 100 question 1's and so on. So your paper is marked by lots of different people, it's all done online.

Reply 226

williamadkins

Original post by sasunerd

If they ask you a question to work out the return on capital, you'd have to find out the total in the end?

Hmm. Good question.

I mean, the ultimate goal is to find the percentage - that'll get you most of the marks. I don't think it'll necessarily lose you marks by finding out the total at the end, but it shouldn't be too difficult anyway. Looking at past papers, the percentage of Return on Capital and the Original Capital Invested figures are usually quite nice, you'll be able to do it in your head most of the time.

Personally, I would. But if it's quite an awkward sum I would leave it, finish the paper, and use those last few minutes after checking the paper to then just work it out on my calculator.

:cool:

Reply 227

Jaegon Targaryen

2

Oh God , BUSS2 just had to be the night before the penultimate episode of Game of Thrones , Season Three didnt it ...

Reply 228

PrinceUpsb

14

Have come across a MS saying: delegation could increase costs in the short term and this could reduce the company’s profit margin
Why could delegation increase costs? The question referred to managers being delegated budgets for their individual sites

Reply 229

needtosucceed=)

10

Original post by PrinceUpsb

Have come across a MS saying: delegation could increase costs in the short term and this could reduce the company’s profit margin
Why could delegation increase costs? The question referred to managers being delegated budgets for their individual sites

this stumped me as well. but then I worked it out
when delegating employees have new different things to do
therefore they'll need training = increased costs

Reply 230

rumenaislam

10

Original post by IHateRevisionOK?

NO NO NO! Responsibility always stays with the person delegating. It's authority that is passed!!!!

Posted from TSR Mobile

Just read my definition for delegation and it says: where responsibility for carrying out a task or a role is passed on to someone else in the business.

Reply 231

sasunerd

1

Original post by williamadkins

Hmm. Good question.

I mean, the ultimate goal is to find the percentage - that'll get you most of the marks. I don't think it'll necessarily lose you marks by finding out the total at the end, but it shouldn't be too difficult anyway. Looking at past papers, the percentage of Return on Capital and the Original Capital Invested figures are usually quite nice, you'll be able to do it in your head most of the time.

Personally, I would. But if it's quite an awkward sum I would leave it, finish the paper, and use those last few minutes after checking the paper to then just work it out on my calculator.

:cool:

Ah thanks for that! I always have that annoying feeling that they'd ask whatever I had little revision on. T_T

Reply 232

Superunknown17

17

A lot of BUSS2 is either in the context or just common sense, as long as you read the context fully and keep referring back to it and think logically about the question then there's no reason why you can't get an A.

Reply 233

nadia_Sibgha1

Even if u hvnt revised properly for the exam

Posted from TSR Mobile

Reply 234

nadia_Sibgha1

Can someone write out a good anwser for 'has divine chocolate ltd become a more competitive company over time'

Posted from TSR Mobile

Reply 235

LaughingGas

OP

5

Well I'm off to relax for a bit, will wake up at 6 just to refresh some parts of my knowledge...

Good luck everyone! Don't stress too much, I'm sure you will all do amazing!

Reply 236

StudentKB

I've noticed a lot of talk on return on capital...
Personally I can't see it being such a big deal if your unable to work it out as only a few marks will be dropped
All you need to do to work it out is: Profit/ capital invested x 100.

Reply 237

rumenaislam

10

Sorry, for all the questions but how do you increase profitability?

Reply 238

PrinceUpsb

14

Original post by rumenaislam

Sorry, for all the questions but how do you increase profitability?

Profitability is measured as Net profit margin or ROC.

To improve your profitability, lowering costs would increase both.
Alternatively, increased sales revenue would do the same.

Reply 239

Millionlightspau

Original post by rumenaislam

Sorry, for all the questions but how do you increase profitability?

you can increase sales, therefore higher revenue and this will lead to higher profit margins. you can also reduce your costs such as negotiate with suppliers for cheaper raw materials...however this could affect the quality of your product which could then lead to the company losing their USP and this could result in the loss of customers and also sales...but that's just what I think...