Hey there! Sign in to join this conversationNew here? Join for free
    Offline

    0
    ReputationRep:
    (Original post by sasunerd)
    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
    Offline

    1
    ReputationRep:
    (Original post by samiya)
    It's the percentage of profit earned after investing in new capital
    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?
    Offline

    0
    ReputationRep:
    Evaluation prompters:-

    Opinion
    Time frames
    It depends on
    Comparison
    Other factors
    Offline

    2
    ReputationRep:
    (Original post by Tarmu)
    Evaluation prompters:-

    Opinion
    Time frames
    It depends on
    Comparison
    Other factors
    exactly this ^
    Offline

    3
    ReputationRep:
    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?
    Offline

    8
    ReputationRep:
    (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.
    Offline

    0
    ReputationRep:
    (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:
    Offline

    0
    ReputationRep:
    Oh God , BUSS2 just had to be the night before the penultimate episode of Game of Thrones , Season Three didnt it ...
    Offline

    3
    ReputationRep:
    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
    Offline

    2
    ReputationRep:
    (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
    Offline

    2
    ReputationRep:
    (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.
    Offline

    1
    ReputationRep:
    (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
    Offline

    14
    ReputationRep:
    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.
    Offline

    0
    ReputationRep:
    Even if u hvnt revised properly for the exam

    Posted from TSR Mobile
    Offline

    0
    ReputationRep:
    Can someone write out a good anwser for 'has divine chocolate ltd become a more competitive company over time'

    Posted from TSR Mobile
    • Thread Starter
    Offline

    2
    ReputationRep:
    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!
    Offline

    0
    ReputationRep:
    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.
    Offline

    2
    ReputationRep:
    Sorry, for all the questions but how do you increase profitability?
    Offline

    3
    ReputationRep:
    (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.
    Offline

    0
    ReputationRep:
    (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...
 
 
 
  • See more of what you like on The Student Room

    You can personalise what you see on TSR. Tell us a little about yourself to get started.

  • Poll
    Would you like to hibernate through the winter months?
  • See more of what you like on The Student Room

    You can personalise what you see on TSR. Tell us a little about yourself to get started.

  • The Student Room, Get Revising and Marked by Teachers are trading names of The Student Room Group Ltd.

    Register Number: 04666380 (England and Wales), VAT No. 806 8067 22 Registered Office: International House, Queens Road, Brighton, BN1 3XE

    Quick reply
    Reputation gems: You get these gems as you gain rep from other members for making good contributions and giving helpful advice.