CH1 Business Environment CH1.1 Recent developments of Hong Kong economy iif) ‘S Lsimple taxation fff U4 % 2ueliance on external trade {2585/9 ‘3 most of the working population are in the tertiary sector ASB) ACI AVRGER B= ASE ‘4 Most businesses in Hong Kong are small and medium enterprises. 585A Whe 35 Mt Wl (ACE eA, SaAE ACRE eT SpE ‘\.5.the main destination of exported goods is the Mainland ‘\.6.Hong Kong does not maintain trade barriers on imports. \.CH1.2 Factors affect business decisions P-E-s- we T -E-Lk A% Policital factor ‘{% Economic factors + {i711 L@Be Soci ©FEME Technology factors ‘© SAA Physical factor: climatic condition AiR lf" RAE Law factors : regulations related (iii eH I factors ; population structure ACV Cultural factors* 1A, [ait qiiality = Closer economic Partnership Arrangement (CEPA) ) sisi Ie ‘\ Tariffs are not levied on goods originating in HK exported to the MT. Dea AY OA aa ‘reduce barriers on the tradé of goods between Hong Kong and the Mainland UD ERAN aR ‘\ promote free tradélin services between Hong Kong and the Mainland (ee ee ARES ATS th ‘\ facilitate cross-boftierbusiness investment between HK and the ML ao AS se NCH1.3 $3#/ 2P51847] Globalisation & multi-national trading company Asia-Pacific Economic Cooperation D eRe ‘N.Ic supports sustainable economic growth in the Asia- | Paitic region. CMBR ay ol gp ‘It eneourages cooperation on trade and investment in the Asia-Pacific region through high-level government- to-government dialogues. & ww eS SAO THEN ee cae es AH 1 (2022 46 1 FA 31 AR @HBEF AGRAM Giveaway ji) World Trade Organisation (WTO) (eR Sa | SWTO settles trade disputes among members. Lee FZ mn E Decisions made by WTO ate binding on all metabers. ‘HES Ee Ba LS WTO Helps developing develop the countries infrastructure needed to expand their trade. eee ETON ER Lage ee I: Mock Exam, DSE jy!‘Impacts of globalization on HK business 5% -P (LAH MMT ‘“S-reduce information cost fei ERAM MRA ELF Fie ‘S-International trade increase ‘\-Production cost decrease 4 ‘\-keen competition 97h ‘S-intemational flow of capital increase BU <2 }7t8_F} ‘S-global sourcing and outsourcing increase 4:ERERHE RNA] ‘\-facilitate transfer of technology between different countries (fe 126 NERA A ATURE IPS LGR cae a ‘good transportation network between Hong Kong and other Asian etes 222s” MiSs [SE | ‘Slower profits tax rate in Hong Kong #21) eA W21 ‘\ Multinational corporations located in Hong Kong jas! ‘\ Their operations also take place outside Hong Kong. : (Mier te MRD i ‘\ Forms of Business Ownership 3/5 ‘\ Sole proprietorship (1 owner) js! :1 (88R# ‘Partnership (2 ~20 owners) 72:2 ~20 (EAE ‘General partners #:fi/7 + \( (Basile Sp iN) ‘\2)Limited partners Limited liability, no: invols® in operation ARAB A + (UBB bri as ss ‘\}Nominal partnersho investmedt and ownership BABA SKOOL #8 + sicH BIB 25 PComributions FEY | Provide\professional advice HME | 2.Enhance repitation ofthe business iff i1 7): 3 Strengthen business linkage SHER H/C898 ‘Private limited company (1 ~50 owners) 6 \ 1 (1. ~ 50 fae) ‘Public limited company (1 ~2 owner) | ae aman | | Baysetup cost faite: eS 4 © 2)Legal entity (ti (i i a i (ATR) RE & 4)Disclose financial status /\/\i/iiti FR we 5 )Tax (( el ee | &6)Ownership transfer (Hi 188°8) To Ce © 7)Ease of fund-raising (S47 5/2) OBA UR oR | 2 (2022 46.17 31 ARG LOE + ee Mock Exam. aHSCHF AGRAM Giveaway ji > DSE ji!Nidoint Venture Siii5% (HAT — (EAS Project » SIM — PRAT + SERRE) ‘formed by two or more entities to develop, produce or sell products. PATI LARS TREE + AES | ‘NA joint venture is an entity independent from all its partners | SERRE RIT EZ ER» | \2Franchise $iiHEE CEFR JUURE Brands HER » (ANIC EAT) | franchisor allows the franchisee to sell its goods or services. S2AMHFZFHRUET AWMHE FLATaMRIR ES ‘2franchisee pays a franchise fee to the franchisor. "HiT #RPA AWOIUHRP HEMI ACRE ‘\ Franchisee may set up his own business to become a competitor. REARS AIA RRB SR ‘tis difficult to wholly control the operation style of fianchisee(s). Reblse Seale EA ABLES A © ‘\\Ifa franchisee manages his business poorly, the reputation of the € affected. SFP ASE ES + SRC ce ‘\3Public enterprise 42/4 Public corporatic [Nselfsfinancing L(7RR# | ‘responsible for their profits and to | | an ‘managed by board of directors 20 ‘entirely owned by the govemment eS SL decisions made by the company. ders 3/17 fy ss 2 PHS HET SE | | ‘Stakeholders of saan of fms i ba GIL B e« ce HITE Aes | of conduct to its employees 41.5 | HE (8 FH jte customers to give comments sia @iee PIE A, ‘Business Ethics and Social Responsibilities H(ilit@etr > [~Nxptain why and how a business should be ethically responsible to various stakeholders. RRS SF Ae Le eR ‘S Goodwill, reputation, customer's confidence (BBE + SBE + RAIL. 3 (2022 4F 1 A 31 ARR A LaREE + SERIA GA Mock Exam aMBALEF AGRAM Giveaway ji) » DSE Hysili!CH2 Management (10%) ‘\ Management Functions #0) 1.Planning || 2. Organizing | |3. Leading | |4. Controlling at si me seid “aegeAa || Ae? emanst SEE? VEER meet AnPa? ALLEGE? RaaRMe! Planning | SMART goals ap Specific 7 measurable “| realistic 1/7 time-bound [ii ey set the goal 225% E> evaluate alternatives SPE (¢I79%-> formulate the detion plan Bi Lh Review and follow up wf all AER C108 a a (il527742121 implement the action plan I wey > Lstrategic plan ifilii/2l.- 4 2.eng-term plan f2i0iztéil 3.operational plan Organizing | ‘a tall organization 3 Mig > HEEL = mais | Stat organisation ji ERS k I Noywider span of control #5) 2081 AO a AIP ‘fewer levels of management ff ‘Snarroser span of control //bHGaREWE® | ‘shorter decision-making process ey ‘S longer decision-making process ‘Nore responsive to market changes. amesrarr ee aoe ‘Organisation: ‘¢ (More / Less) ‘SSpan of control #:(i* (Wider / Narrower) ey Organizational structure * (i ‘by level and by authority {: #0] “by function (20) ‘Nby product #27, “by location {21 layers { Nvstep I: set performance standards Controlling alae RL er \vStep 2: measure actual performance (Monitor and record) @eagem> ateea AvStep 3: compare actual performance with the standards iene > Communicate Results SRF: AvStop 4: take corrective actions iis 71H Feedbackjaif Ani LaRE + % iL: Mock Exam. f AGRAM Giveaway iii) > DSE jit!\TTSuRY/E (line authority) > bs) Ps \ A(PRLE(staff authority) > si i (haiP sss FEELS BITE LISS Hic > RANT AEA | ea AA AEA + IRE ICH RET» HOLA ATI HE « Democratic leadership REAR Leading Autocratic iit ‘Laissez faire GH)? (centralised ‘psissH2) Ene NCHS TBR SNAPE NBER Nf NAUE Ci Ee) Noy/b4l NTeamA + TeamB ~ TeamC NAME - BE. SB | ‘Each subordinate directly reports to one supervisor only. Sema 4 Lae y of direction i /ifi* (AMAIA) > [FE Cutbudget......] ‘create coherence among employees to achieve the same objectives | oa, ER ALT ARAL ER | ; ; , j | ‘avoid management confusions/conflicts among different departments S6e6e668 BCPA ERR, Vhoelp to build up team spirit B22 1710058 S (2022 F 1 A 31 ARCA LEER » AEP Sit: Mock Exam iB LHF AGRAM Giveaway jill) > DSE ji!‘\4Authority and responsibility | fi{/)7#{i spn | raged rsataic | Frames ea ATS A ‘S-botter staff's morale #7) ET-LA, ‘S facilitates performance monitoring #735985 TE) Authority Vs Responsih Tema DPR ‘authority can be assigned to subordinates. > Delegation #27 (5 3)) FiBL Las) RECS FB ‘S Authority is the right to direct andlimake ditions RRS RRA ‘\5.Management by objectives | [/#/2#{] (MBO) > @#ili/}¥/") / HG ( San gE AR) Gas sD setanstn ‘S-management and staff have to meet with each other regularly to joialy ogee wore set objectives, develop an action plan and review performance Safe PACS WAG » SPLAT ICEL + Aoi PTTL eB t MBO \ Benefit iii Process ‘S-improve the superiorsubordinate communication ox, Way a. N27 Ci2.4.Business Functions i 30) *Lv5* *G0G [al oni! i ~ SRA LF LATE) PVRS AICHE POR IRS ‘\3.Contribute a majority of employment opportunity in HK ARERR NR HR BA FM it MKT Gig SHAKUR ARBEL.. )| SEAR) | TREE. OM #& IM #8 (nABe#) RM St (ABe%) DIMERS RAMESH.. SAM RGI LRTI. | RATE RVATEA.. G25. Communication process #/HifAmme0s 971%) Encode {fi5 > Decode jl; ‘Entrepreneur (i: SDesire for independence 58822. 3 CH2.6.Small and Medium Enterprises |! /|.'{/( 9% (SMEs) ‘SL Responsive to market changes AUSF tise ‘\.2.Offen provide products and services that complement large companies 6 (2022 48.1 31 ATR Loe + Se @HBNEF AGRAM Giveaway ji) > x8 8 b: Mock Exam DSE Hilti!Satish LRecording business transactions s2#f-» 2.classifying business transactions Jf(PS2% 55738 summarising business transactions 4.communicating the performance of the business to different stakeholders (2175 (5li5> (088 iP AONE ‘\ The accounting cyc! in sequence (i/- (AiR) (EH ‘\1. record transactions in day books {{ {| :¢’¥ 225 (Core ye) ‘\2. post entries to the ledger accounts ##/{ 4/7 "i(/i/ 3. prepare a trial balance “tii ‘\4,balancing day adjustments iif (Core ii; » jdyia| Step #159), 5. prepare financial statements ‘iii ifi:% (ISHBS) ‘STEP1.Books of original entry (Daybooks) [iii iilisii “187 For if Cash Book HHH Sales Journal {4 Purchase Journal RBA credit sale {3H credit purchase [lit Return Inwards i:{{iii|") Return Outwards tic!) )Journal i522 The (General) Journal #5 36° i785) AWE 5 (lite Ef 4.Purchase of assets (other than inventory on credit) (12 > DrMotor V. {if 0H (Gr Other payable (AZzAEE A 8 Dr other receivable) st) 3.Drawing of assets (other than cash) (3/2514) Zi DDeDrawing (HE Cr CF OBR sie ee 4/5.Return In/Out of assets (other than inventory) (11:2 accounting equation @{]39:1 Asset HH (HSH) Capitial GACH 21H) + Liabilities Git (@@40F) | ae ene eT 98? (ovnecae? STEP2.\Double entry system {30-0 A +E +D c +R +L | +Debit()ji({}) Credit(s) Debit (ii('5) +Credit( ini) | Expense | Draw Revenue Liabi Debit + + + : : : Credits | - : : + + + 7 (2022 4% 1 FA 31 ATH BENE + SBR GL Mock Exam SF AGRAM Giveaway ji) > DSE Hj!‘Nominal account #1 RENE PI PARMAR Peash at bank, HLAFFEA | Poales, 682 purchases EE Dirade receivables, REUKBLE | Sretum outwards, HSA rade payables Hep st | returns inwards PREP Bank loan account $2/F SEKI | Dottie salaries i Equipment account ils is > Account payable — Katie HASH - WLS Account Receivable — Miki (elie — FHL \ STEP3.Trial balance 3.8% (> Summary» 908 + corse ‘rial balance as 31 2024 cr 8 s “uracy of bookkeeping entries Ai WSCALAR AY FLAT MSHI 8 (2022 46.1 FA 31 ATR LORIE » AERA Sb Mock Exam aHRISCEF AGRAM Giveaway ji) > DSE Hi!STEP 5. Financial statements [7/22 income statement / Profit & Loss (¥%) _| financial position/Balance Sheet REAL « Rea patie AZCHL Ast MLAB NN RFR fo BE RRO ua a NARRATE | NAL ATELESS ve HEPT Sata Explain the uses and limitations of financial statements. (1)j'!//i/#/40 201/22 200 il] NER (LAY NUR EESIT NRE BRST SAS NA SRA TLL TM A RS IRE, 5.1 Income statement fii CHS AED) Income statement for the year ended 31 Decestiber 2020 (ie2i'22) s s Be Sales x Be S880 Less: Retum inwards z! x sASCRaT Net sales x we Biba Les: Cost of goods sold seer Openiiig.inventory x in: SER Add; Purehase x x in: Sa See ‘Add: Camiage inwards x x we call Less: Return outwards x x wit TeBe Less: Closing inventory x x fl Gross profit x a (en Les: Expense (2! wom Carriage outwards x flats Rental expenses x We Salaries x x Fl Net peofit x Opening inventory + Purchase inventory - Closing inventory + Cl - RO >£// Gross Profit = Sales - COGS fi)?! Ratio = GP/SALES > Hil Net Profit = Gross Profit - Other operating expense + Other revenue 37/5 Ratio = NP/SALES 9 (2022 4 1 A 31 Aah Ea + Mock Exam aHSCHF AGRAM Giveaway ji > DSE ji!5.2 Balance Sheet Hiaei(tysMiTatkieet** > CLA RD) Statement of financial position as 31 December 2020 $s $ nei Non-current assets SUS RRA Office equipment x ott Motor eae Current assets fi Inventory x mC Trade receivables x sariteak Cash at bank x ee Total Asset x sneer itt ess: Current Liabilities ats Trade payable 0 se Bank overdraft 0 x seas Less: Non-Current Liabilities Loan from Katie's Company, 00, seu Total Liabilities x BOR Financed by eee) Capital as January 2020 x soe Add» Net profit x Total Gaptial x \ Accounting ‘Assumptions - Principles and Conventions| 2/2» (HJ (€10!] “business entity (ali (FATIMA Cite era) Sgoingeconcern snes (feu F alan + Pres ‘econsistency RAEN Mat FIPS AEMEAACEIRIAl + AALS EL epee) historical cost iff Hit4 pve ASHAISELARIS » OBSETT (Reuter ze8) | ‘accrual FR + MRED > OPE PAAR | Basic Ratio Analysis Gurrent ratio (Working capital ratio) Quick test ratio (Liquid test ratio! Acid test ratio Noemie Capa) ERLE CHINA) “Current assets _ Stiri _ Current assets — Inventory _:fti)Hzi — 726% ~ current liabilites iGheate - ‘current liabilites Feet ‘\Return on capital employed EBIT (Net profit) _ Ae Captial(#A) + CLLR 10 a 17 31 ARG _LaREE + HERE GL Mock Exam HE AGRAM Giveaway jill) > DSE H(i!CR eee mb) CH4,1.Time value of Money [i/"! fi ko RGR B)S 44) FV CRAMPS AAR ER 3 WHALER AK + RYDE 2» SE PBBERE 2 + WR A> SESE 4 WR RATA if 12> FERASERE 12 + (58) * = ERIR (SA 7 ERGY WHERE » discount rate = r% + = 4 Meien/ bl AMIDE « (CH4.2.Consumer Credit (it? 7i(/1i% ‘Different types of consumer credit 7¢/EREMITIEBE TES ‘Bank overdraft TAY Scredit card (i Hi x mortgage loans® #1562 ‘SExplain the importance of maintaining a good personalieredit record. ~~] — eae eect eo | 4.3K Lower the cost of loans 2. IAAT increase|the chance of getting loans satis) higher credit limit ‘personal loans (CH4.3.Personal Financial Planning and investments [i \*i4 Sis/003 2] NE 2A eA RRA: Aa A; ‘Ssaving/term deposits Gia /Eii/rit “sbondsidebentures (4% | ‘preference shares (7!!! $30,000 $1,500 $1,500 EWRACL® : GERRARLAML ARY 5% » 25H Rea ATA BSPAIIRL | ut 2022 46 1 Fh 31 Aa aR 28 9 Mock Exam ache AGRAM Giveaway ji) > DSE jit!‘\ There are circumstances under which accrued benefits may be paid before members reach the age of 65, provided that specified conditions can be met. The circumstances are ¢ BFR F + REM AHR + HIST 6S PRATER es «Abhi TRtLHE : ‘S-carly retirement at age 60 or above 5 ti 60 AEE TRAN ‘\-permanent departure from Hong Kong + 7k /ABEIA 3S EOF TDA 60 pate + BILL 65 were » HEE A SARE ARMRESHET. t= CHA. (fii A REE eT Sem a AE) NL RAMOS TATU BRR TESTER NRA NBT SAIS RATE E NAAM FP RRR ACC + DRE IRLAR OBOE ‘ALE HELE & Investor Compensation Fund: Max $150,01 Cli4.6 Stock Trading as an Investment [127% 5" ‘\Factors affecting share prices AGA 5UEASGUPIR General economic condition HEMP | Ci pees Political factors BUS HAF Interest rate FH | Di \d pol Industry prospects #38 80.5 Speeulition ‘Knowledge about the basic listing r BLB PRA RA MIE LER operating history and manageme requirements USER + 1 profit attributable to sha a. Brevenue WEA ‘market capitalization 4.cash flow FAA _ HKS3,000 MH -iffl B HKSI.S 12 (202245 1A 31 ATR LaRES » SePELE S_L Mock Exam iB LHF AGRAM Giveaway jill) > DSE jy 3i!