Analyse the benefits of using internal sources of finance for business growth.

Mark scheme

Marking points from the official mark scheme (Feb/Mar 2022). The mark or mark type is shown in brackets.

1. [K&U] Clear understanding of internal sources of finance.
2. [K&U] Clear understanding of growth of a business.
3. [App] Reference to the use of internal sources of finance (e.g., Retained earnings, Sale of unwanted assets, Sale and leaseback of non-current assets, Working capital).
4. [App] Reference to growth of a business (e.g., having more machinery, having more workers, making more products, having more customers, selling more products, increasing product portfolio, having larger / more premises).
5. [An] The benefits and limitations of different sources of internal finance.
6. [An] Interest saved.
7. [An] No need to take out loans.
8. [An] Flexibility of using internal sources.
9. [An] Ready availability of internal sources.
10. [An] Less risky than using external finance.
11. [An] The use of different sources of finance for particular types of growth.
12. [K&U] Clear understanding of published accounts.
13. [K&U] Clear understanding of performance of a business.
14. [K&U] Clear understanding of (luxury) hotel.
15. [App] Reference to the use of published accounts.
16. [App] Reference to the performance of a business.
17. [An] Analysis of ways of measuring the performance of a business.
18. [An] Analysis of how published accounts provide a good measure of the performance of a business.
19. [An] Analysis might recognise the usefulness and limitations of published accounts.
20. [An] Limitations of quantitative measures of performance.
21. [An] Potential importance of qualitative measures of performance.
22. [Eval] A candidate may make a judgement/conclusion as to whether the published accounts of a (luxury) hotel provide a good measure of the performance of the business.
23. [Eval] These judgements/conclusions may be made at any point in the essay as well as in a concluding section.
24. [Eval] The context is a (luxury) hotel.
25. [Eval] Reference to a hotel e.g. rooms, guests, holidays, business travellers, facilities (meals etc).
26. [Eval] Evaluation of whether published accounts provide a good measure of the performance of the business.
27. [Eval] Evaluation of the relative usefulness and limitations of published accounts.
28. [Eval] Evaluation of whether the usefulness of published accounts varies depending on which stakeholders of the business are using them.
29. [Eval] Evaluation of whether other measures provide a more appropriate measure of the performance of the business. Eg quality of service, comments on feedback questionnaires, reviews on forums, return customers.
30. [Eval] Reference could be made to the level of competition in this market.
31. [Eval] Strong answers may refer to the target market of luxury hotels and that their performance is measured differently to more basic or standardised hotels.