Business Finance (Cambridge (CIE) A Level Business): Exam Questions

Fenmarsh

Fenmarsh processes and packs fish in country H, supplying one supermarket chain. It has been offered a contract with a second chain that would roughly double its output.

Taking the contract requires a new chilling line costing $1.4m, plus additional staff. Supermarkets pay Fenmarsh 60 days after delivery, while Fenmarsh pays the fishing boats within 7 days.

Table 1: Fenmarsh selected data

The Finance Director, Ana Ferreira, notes that cash and retained profit together come to $550 000.

The Managing Director, Joe Tan, wonders whether Fenmarsh should grow more slowly and fund expansion from its own profits instead.

Upton Access

Upton Access hires scaffolding to construction firms in country W. Last year it reported a profit of $480 000, yet its bank balance fell by $150 000 over the same period.

Table 1: Upton Access, last year

The Managing Director, Rhys Calder, cannot understand how a profitable year has left the business with less money than it started with.

Hollingworth Timber

Hollingworth Timber supplies timber to builders in country M.

Table 1: Hollingworth Timber selected data

During 2025 two builders went into administration owing Hollingworth Timber $95 000, and its main supplier shortened credit terms from 60 days to 30 days.

The Finance Director, Grace Iwu, is concerned. The Sales Director, Femi Lawal, argues that holding more timber lets Hollingworth Timber fulfil orders immediately and win business from slower rivals.

Verity Supplies

Verity Supplies sells industrial cleaning products to hotels and offices in country K, all on 30-day credit terms.

Table 1: Verity Supplies selected data

Verity Supplies' sales team is paid commission on sales made, not on payments collected.

The Sales Director, Marco Bellini, points out that revenue has grown by almost 19%.

The Finance Director, Sara Haddad, is less pleased.

Marnock

Marnock roasts and sells coffee in country P. It has two separate financing needs.

Table 1: Marnock's two financing needs

The roasting machine is expected to last twelve years. The additional beans are bought each autumn to meet Christmas demand and are sold by January.

The Finance Director, Ivan Petrov, proposes funding both needs with a single five-year bank loan at 7%, since that rate is well below the 12% overdraft.

Larchmere

Larchmere operates four day nurseries in country T. It has struggled since a competitor opened nearby and since new regulations increased the number of staff required per child.

Table 1: Larchmere selected data

Larchmere's bank has declined a further loan. Its landlord has offered to defer three months' rent, worth $90 000, if Larchmere signs a five-year lease extension.

The Finance Director, Nia Roberts, argues the immediate problem is cash, and the deferral buys the time Larchmere needs.

The Operations Director, Sam Oduya, disagrees. Enrolments have fallen 21% while regulation forces staff numbers up, so in his view deferring rent only postpones the moment of failure.

Orrell Signs

Orrell Signs manufactures industrial signage in country F. A national logistics company has offered it a contract for 4 000 signs, the largest single order Orrell Signs has ever received.

Table 1: Orrell Signs, current position and proposed contract

Materials must be bought before production begins, and Orrell Signs would not be paid until around five months after that point.

The Sales Director, Ade Balogun, wants to accept. The contract would earn roughly $68 000 of profit and establish Orrell Signs with a national customer likely to reorder.

The Finance Director, Ruth Lindqvist, points out that cash of $95 000 plus a $150 000 overdraft comes to $245 000, against a materials bill of $280 000.