OCR Business studies F297 - SHL Pre- Release 2014/2015

If ratios were to come up instead of critical path what would be the most likely ones?

What are the pros and cons of creating the sub brand


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how would you conclude a question about buying in to Mardidi?

what type of things would you write for is SHL's sales revenue objective of £70m achievable?

Is it realistic and how can it be achieved. E.g. by diversifiying into other markets (teenage), and if they get it right, the rewards will be high. However you should take note that the older population (i.e. 65+) is expanding rapidly as we are living in an 'aging population', and they have more disposable income, so it would be good idea for SHL to look towards this market.

You could also put that in with whether or not they should invest in mardidi. Would make a good evaluative point!

Our teacher told us today that apparently there was a leak on this question around Christmas so its a virtual certainty that they would have changed the CPA. Actually, there is a substantial amount of float on the one that we have so I wouldn't be surprised if they took the opportunity to add another stage in. I was very surprised that there wasn't a stage for the assessment of the product by its target market after the initial development and manufacturing phase. Could be possible!!!

Pros:

- SHL have experimented with this is the past and therefore have experience.
- It will give them 100% as well as keeping 100% of the profits.
- Much more likely to allow them to achieve their sales revenue objective.

Cons:

- Although the case study doesn't specify, its unlikely SHL will have that much control over the sub brand as they only have a 25% share in it.
- Mardidi is located in the USA which means profits cant be accurately predicted due to the exchange rate.
- The ARR on Mardidi is 8.4% as oppose to SHL's current ROCE of 38.4% so they would be much better off expanding their current business.

Hope that helps

Hi guys - please help!

Firstly, can someone tell me which ratios I REALLY need to know for the predicted questions? They aren't sticking so if I could just remember a few to try get my marks up id be grateful

Also, can someone tell me the calculations for the payback for the investment in mardidi.

Thanks in advance.

When OCR released the Case study for the first time, it already had the last two nodes completed. It was then taken down at the end of December and then put back on again in January, with those same nodes now blank.

I'm having a real issue with remembering the ratios aswell. For payback of Mardidi investment, you can look at the table in the case study which gives details about the investment and how much it will generate for SHL over the next 5 years. The initual cost is $5m, so you can work out that this will be paid back somewhere between years 4 and 5. You then work out the difference what's already been paid up to the end year 3 , (3.1m) and then the remaining 1.9 million that needs repaying, you can calculate how many months within years 4 to 5 it will take to pay back by doing 1.9/4.0 (4.0) because this is the total that will be generated within the full five years, and then multiply this figure by 12 as there's twelve months in a year. This will give you 4years 5.79, rounded up which gives a payback of 4 years 6 months! Hope that helps, sorry if it's a bit confusing! X

Thankyou! If I find anything on ratios I'll let you know hahaha it's abit confusing but I'm just gonna remember the figures and hopefully just wing it xD