O-LevelBusiness StudiesFinancial information and decisions7115/11 · Oct/Nov 2010 · Q320 Marks

Manfred is the Finance Director for a large public limited company called BTX. He sets the financial budgets for all the departments. Manfred is worried about the falling sales of BTX. He was looking at the data in Table 1. Table 1: Selected Financial Data from BTX ($000's) | | 2008 | 2009 | |---|---|---| | Sales | 1200 | 1100 | | Net Profit | 200 | 250 | | Capital employed | 1000 | 1500 | | Current Ratio | 1.2 | 0.7 |

(a)What is meant by a financial budget?[2]
(b)Calculate the net profit margin for BTX in 2009.[2]
(c)Explain what the current ratio tells Manfred about BTX's financial position.[4]
(d)BTX wants to raise new funds in 2010 to help finance its growth plans. Identify and explain three ways it could do this.[6]
(e)Do you think that the management of BTX should be worried about the performance of the company in 2009? Justify your answer.[6]

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Topic: Financial information and decisions, O-Level Business Studies (syllabus 7115). Structured question, 20 marks.
Source: O-Level Business Studies, Oct/Nov 2010 Paper 1 Variant 1, question 3.

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