Exam code: 9BS0
Read the following extracts (D to G) (opens in a new tab) before answering
Following changes to working practices in its distribution facilities Sports Direct reported significant improvements in labour retention and lower levels of absenteeism in 2018
Using information in Extract G, explain one impact of improved Human Resources performance on Sports Direct's competitiveness.
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Read the following extracts (A to D) (opens in a new tab) before answering
In 2019 Sports Direct reported that sales revenue had increased to £3,701.9m. Its cost of sales amounted to £2,118.4m with selling, distribution and administrative expenses of £1,413.8m
Calculate the percentage difference in Sports Direct's gross profit margin between 2018 and 2019
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Read the following extracts (A to C) (opens in a new tab) before answering
Bon Bon's opened its distribution facility in Ripon in 2018. Mark Rowntree has experienced some difficulties in accurately measuring and monitoring labour productivity at the facility and is concerned that workers are being considered less efficient than those at the packing facility in York
Explain one method Mark Rowntree could use to measure labour productivity at the Ripon distribution facility
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Read the following extracts (E to G) (opens in a new tab) before answering
In 2014 Pfizer achieved a Return on Capital Employed of 5.70%
Using the data in Extract E, calculate Pfizer's value of capital employed in 2014
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Read the following extracts (A to C) (opens in a new tab) before answering
Explain one drawback to Aldi of using empowerment strategies to reduce high levels of absenteeism in its stores
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Read the following extracts (A to D) (opens in a new tab) before answering
Using the data from Extract A, calculate the difference in the gearing ratio for easyJet plc between 2019 and 2020. You should state the difference to two decimal places. You are advised to show your working.
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Read extracts A to D before answering questions
Extract A
Aurelia Kitchens Ltd
Aurelia Kitchens Ltd is a privately owned UK manufacturer of premium fitted kitchens. The business designs, manufactures and installs kitchens for domestic customers across the UK. Aurelia positions itself as a high-quality brand, competing on design, durability and customer service rather than low prices.
Aurelia Kitchens Ltd was founded in 2008 by two former furniture designers. The business operates from a single manufacturing site in the West Midlands and employs 165 people. Aurelia sells its kitchens through a network of 12 UK showrooms, all owned by the business.
Demand for fitted kitchens increased during 2020 and 2021, as more people invested in home improvements. Aurelia experienced strong sales growth during this period and expanded its workforce by recruiting additional skilled production workers and installation teams.
Aurelia’s management team believes that long-term growth will depend on improving productivity at its factory and making strategic investment decisions to support future demand.
Extract B
Employment and productivity at Aurelia Kitchens Ltd
Aurelia’s managers are reviewing labour productivity and unit costs. Some experienced workers have raised concerns that recent recruitment has reduced average skill levels on the factory floor, increasing the need for supervision and training.
Extract C
Investment options under consideration
Aurelia is considering investing in new computer-controlled cutting and assembly machinery. The machinery would automate several stages of the production process and reduce reliance on manual labour.
The proposed investment would cost £2.4 million and is expected to last five years, with no residual value. Forecast cash inflows from the investment are shown below.
Aurelia’s management uses a discount rate of 9% when appraising investment projects.
Extract D
Growth strategy
Aurelia’s sales director has suggested expanding into the European market, beginning with Ireland and the Netherlands. This would involve exporting kitchens manufactured in the UK and working with local installation partners.
However, some directors favour focusing on the UK market and increasing capacity at the existing factory. They argue that exporting would increase complexity, currency risk and delivery times, potentially damaging Aurelia’s reputation for customer service.
The directors must decide which growth strategy is most suitable for Aurelia over the next five years.
Using the data in Extract B, calculate the change in labour productivity of Aurelia Kitchens Ltd in 2021 and 2022.
You are advised to show your working.
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Read the following extracts (E to H) (opens in a new tab) before answering
Assess two reasons why The Gym Group's financial performance has improved between 2014 and 2015
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Read the following extracts (A to D) (opens in a new tab) before answering
Use the information in Extracts A to D to assess Morrison's financial performance in 2015
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Read extracts A to H before answering questions
Extract E
PulseTech plc
PulseTech plc is a UK-based public limited company that designs and sells wearable technology products, including fitness trackers and smart health monitors. Its products are sold online and through electronics retailers in the UK, Europe and North America.
PulseTech’s strategy focuses on innovation and data analytics. Its products allow users to track physical activity, sleep patterns and heart rate. The business invests heavily in research and development (R&D) to differentiate its products and maintain a competitive advantage.
Extract F
PulseTech plc – selected financial information (2023)
PulseTech’s directors are under pressure from shareholders to improve profitability, following a slowdown in revenue growth during 2023.
Extract G
Production capacity and outsourcing
PulseTech currently assembles its products at a factory in Eastern Europe. The factory is operating at 92% capacity utilisation.
Demand forecasts suggest that sales could increase by up to 30% over the next two years if PulseTech launches a new health-monitoring device. To meet this demand, PulseTech is considering two options:
Expanding its existing factory
Outsourcing production to a specialist electronics manufacturer in Asia
Outsourcing would reduce PulseTech’s control over production but could lower unit costs.
Extract H
The global wearable technology market
The global wearable technology market has grown rapidly over the past decade. The market was valued at $61.3bn in 2020 and is forecast to reach $150.6bn by 2030, representing strong long-term growth.
Growth is driven by increased health awareness, advances in sensor technology and the integration of wearable devices with smartphones and health apps.
However, the market is characterised by:
Rapid technological change
Short product life cycles
High levels of research and development spending
PulseTech’s senior managers must decide how best to position the business to benefit from future market growth.
Using the data in Extract F, assess PulseTech plc's financial performance in 2023.
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Read the following extracts (D to G) (opens in a new tab) before answering
Sports Direct aims to reduce the labour turnover of its workforce. To achieve this, it could introduce an employee share ownership scheme or implement an empowerment strategy
Evaluate these two options and recommend which one is most suitable for Sports Direct to achieve its aim of reducing labour turnover.
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Read the following extracts (A to D) (opens in a new tab) before answering
Mindful Chef's owners have set the objective of increasing its operating profit margin. This might be achieved by growing its UK customer base or by entering into a joint venture with Blue Apron in the US
Evaluate these two options and recommend which one might be most appropriate for Mindful Chef to increase its operating profit margin
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