AQA A2 BUSS3, 13 June 2013

What is an ideal number for Asset Turnover?

Reply 41

Original post by Indyy

What is an ideal number for Asset Turnover?

It depends on the business. A capital intensive business with large amounts of stock (For example a manufacturing business) would benefit from a low asset turnover. Whereas labour intensive, service providing businesses would benefit from a high asset turnover.

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Reply 42

Original post by CharlieTT

It depends on the business. A capital intensive business with large amounts of stock (For example a manufacturing business) would benefit from a low asset turnover. Whereas labour intensive, service providing businesses would benefit from a high asset turnover.

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Yeah, i got that from my textbook too but the figure in the example is compared to the UK average which is out of date?

Maybe i worded my question wrong?

What's the UK average for Asset Turnover?

Reply 43

Original post by Indyy

Yeah, i got that from my textbook too but the figure in the example is compared to the UK average which is out of date?

Maybe i worded my question wrong?

What's the UK average for Asset Turnover?

The only figure I can find from a google search is 3:2. In the end, an examiner isnt going to check for it considering how many papers they have to mark so you'll probably get a mark for application even if it is just made up.

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Reply 44

Khilen

OP

Original post by CharlieTT

It depends on the business. A capital intensive business with large amounts of stock (For example a manufacturing business) would benefit from a low asset turnover. Whereas labour intensive, service providing businesses would benefit from a high asset turnover.

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Why would a capital intensive firm benefit from a low Asset turnover? Dont all businrsses aim too have the highest asset turn over because it meausres how much rev is generated from every 1£ of assets?

Reply 45

Infamous12

Original post by Khilen

Why would a capital intensive firm benefit from a low Asset turnover? Dont all businrsses aim too have the highest asset turn over because it meausres how much rev is generated from every 1£ of assets?

capital intensive firms have more assets to use so naturally their asset turnover will be less than labour intensive because the labour intensive firm will use less assets = higher figure for labour turnover.

Reply 46

Original post by Khilen

Why would a capital intensive firm benefit from a low Asset turnover? Dont all businrsses aim too have the highest asset turn over because it meausres how much rev is generated from every 1£ of assets?

And it's lower in a capital intensive business because the capital owned by a business is included in its 'Net Assets', and therefore decreasing the value of the turnover.

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Reply 47

emgeesify

For 18 makers that end with 'to what extent do you agree with this view?'

Do you do one point for and against and then evaluate?

Reply 48

Original post by emgeesify

For 18 makers that end with 'to what extent do you agree with this view?'

Do you do one point for and against and then evaluate?

I read somewhere you do two for your viewpoint and one against it.

Not entirely sure tbh

Reply 49

FaizanKauser

Original post by emgeesify

For 18 makers that end with 'to what extent do you agree with this view?'

Do you do one point for and against and then evaluate?

Yes, If it asks for 'what extent', you have to give both sides of the argument.

I usually start off my 18 mark essays like, 'To some extent, I believe that...

When I start the against paragraph, 'However, to some extent I also believe that...

It's useful to evaluate after each paragraph, so after you complete your 'For' paragraph, you should quickly provide some sort of evaluative conclusion or just give your opinion, as you may receive 1 or 2 marks for evaluation. The same should also be done for the 'Against' paragraph.

I did this exam in January, however, I didn't do so good, ended up with a C...

Reply 50

Here's a good plan for each of the questions.

Question 1

Definition of topic
Argument

[*]Point
[*]Evidence/Example
[*]Evaluate

Counter Argument

[*]Point
[*]Evidence/Example
[*]Evaluate

Question 2/3

Introduction

[*]Definition of topic
[*]Relate the case study to the question

Argument

[*]Point
[*]Evidence/Example
[*]Evaluate
[*]Link back to question

Counter Argument

•

Point

•

Evidence/Example

•

Evaluate

•

Link back 4o question

Concluding Paragraph

[*]Answer/Address
[*]It Depends
[*]Most Important

Question 4

Introduction

[*]Definition of topic you will be discussing
[*] Setting the scene for what you're discussing

Argument

[*]Point 1
[*]Evidence/Example 1
[*]Evaluate 1
[*]Point 2
[*]Evidence/Example 2
[*]Evaluate 2
[*]Link Back to question

Counter Argument

[*]Point 1
[*]Evidence/Example 1
[*]Evaluate 1
[*]Point 2
[*]Evidence/Example 2
[*]Evaluate 2
[*]Link Back to question

Concluding Paragraph

[*]Answer/Address
[*]It Depends
[*]Most Important

That was effort to write on a tablet >. <

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Reply 51

Commercial Paper

21

Original post by CharlieTT

Here's a good plan for each of the questions.

Question 1

Definition of topic
Argument

[*]Point
[*]Evidence/Example
[*]Evaluate

Counter Argument

[*]Point
[*]Evidence/Example
[*]Evaluate

Question 2/3

Introduction

[*]Definition of topic
[*]Relate the case study to the question

Argument

[*]Point
[*]Evidence/Example
[*]Evaluate
[*]Link back to question

Counter Argument

•

Point

•

Evidence/Example

•

Evaluate

•

Link back 4o question

Concluding Paragraph

[*]Answer/Address
[*]It Depends
[*]Most Important

Question 4

Introduction

[*]Definition of topic you will be discussing
[*] Setting the scene for what you're discussing

Argument

[*]Point 1
[*]Evidence/Example 1
[*]Evaluate 1
[*]Point 2
[*]Evidence/Example 2
[*]Evaluate 2
[*]Link Back to question

Counter Argument

[*]Point 1
[*]Evidence/Example 1
[*]Evaluate 1
[*]Point 2
[*]Evidence/Example 2
[*]Evaluate 2
[*]Link Back to question

Concluding Paragraph

[*]Answer/Address
[*]It Depends
[*]Most Important

That was effort to write on a tablet >. <

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You don't need to evaluate on question one though.

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Reply 52

Original post by will2348

You don't need to evaluate on question one though.

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It really means expand/explain in this context. Sorry for confusion.

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Reply 53

cera ess six

Hi everyone can someone help me fill in the gaps please!

Liquidity Ratios

Gearing ratio: shows how much the business is financed through long term borrowing/bank loans
Current Ratio
Acid Ratio:

Financial efficiency:

Inventory(stock) turnover: how much a business sells all of its stocks in a year
Asset turnover:
Debtor days: How many days it takes for a business to get back what its owed
Creditor days: how many days it takes for a business to pay its liabilities (suppliers)

Shareholders

Dividend share: how much a shareholder gets back per share
Dividend yield: the rate of return off the share

Reply 54

Commercial Paper

21

Original post by cera ess six

Hi everyone can someone help me fill in the gaps please!

Liquidity Ratios

Gearing ratio: shows how much the business is financed through long term borrowing/bank loans
Current Ratio
Acid Ratio:

Financial efficiency:

Inventory(stock) turnover: how much a business sells all of its stocks in a year
Asset turnover:
Debtor days: How many days it takes for a business to get back what its owed
Creditor days: how many days it takes for a business to pay its liabilities (suppliers)

Shareholders

Dividend share: how much a shareholder gets back per share
Dividend yield: the rate of return off the share

Current ratio is simply the amount of current assets: current liabilities. This is a less harsh measure as by this measures inventories are included. Acid test is exactly the same but under current assets it excludes inventories because this is viewed as the least liquid asset (one that would take the longest to convert into cash). Asset turnover refers to how efficiently a business is using its assets to generate revenue. So for every one pound of assets, it might be generating two pound of revenue. Asset turnover provides no insight into profitability though.

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Reply 55

Infamous12

Original post by cera ess six

Hi everyone can someone help me fill in the gaps please!

Liquidity Ratios

Gearing ratio: shows how much the business is financed through long term borrowing/bank loans
Current Ratio
Acid Ratio:

Financial efficiency:

Inventory(stock) turnover: how much a business sells all of its stocks in a year
Asset turnover:
Debtor days: How many days it takes for a business to get back what its owed
Creditor days: how many days it takes for a business to pay its liabilities (suppliers)

Shareholders

Dividend share: how much a shareholder gets back per share
Dividend yield: the rate of return off the share

Asset turnover is the amount of sales a business generates by using its net assets. The higher the figure, the better they are utilising their assets.

Reply 56

username1136783

can anyone explain to me basically what gross profit margins show? like whats the difference if its high or low and why does it matter?

Reply 57

Original post by sofiax0

can anyone explain to me basically what gross profit margins show? like whats the difference if its high or low and why does it matter?

Gross Profit Margins measure what percentage of sales are Gross Profit. High GPM means a large amount of its revenue is converted to gross profit.

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Reply 58

jacktomos95

Anyone got any idea what the 18 markers could be on

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Reply 59

username1136783