BTEC LEARNER ASSESSMENT SUBMISSION AND DECLARATION

When submitting evidence for assessment, each learner must sign a declaration confirming that
the work is their own.

Learner Name: Name Surname

Assessor Name: Abdullah Rakhimkulov

BTEC Programme Title: Pearson BTEC Level 3 International Foundation

Diploma in Business
Unit or Component Number and Title: Unit 7: Business Decision Making
Assignment Title: Pearson Set Assignment
Date Assignment Submitted: 10.05.2022

Please list the evidence submitted for each task. Indicate the page numbers where the evidence
can be found or describe the nature of the evidence (e.g. video, illustration).

Assignment task reference Evidence submitted

Learner declaration

I certify that the work submitted for this assignment is my own. I have clearly referenced any
sources used in the work. I understand that false declaration is a form of malpractice.

Learner signature: Date: 10.05.2022

1.0 INTRODUCTION.

SCENARIO

write ONE paragraph, do not just copy from Assignment brief, instead paraphrase

THE BUSINESS

write ONE paragraph, do not just copy from Assignment brief, instead paraphrase

THE AIMS AND OBJECTIVES OF THE BUSINESS

write ONE paragraph, do not just copy from Assignment brief, instead paraphrase

1. to increase brand awareness

2. to break even at the end of the first year.

MARKET TRENDS

write ONE paragraph, do not just copy from Assignment brief, instead paraphrase

INTRODUCE WHAT WILL BE DONE IN THIS REPORT

Your detailed report must examine the two options Bodhi is considering for the business. It must

be set within the context of the aims and objectives of the business and make

reference to the scenario throughout.

Your report must include a rationale that shows:

 the different factors in the internal and external business environments that influence

each option, and the relative importance of these factors

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  possible risks for each option, and reasonable alternative approaches that could be

taken

 the implications of human, physical and financial resources on the operation of each

option

 the influence of legislation and regulation on each option

 the use of financial forecasts and ratio analysis to predict the performance of each

option (and the relative importance of this data)

 a supported conclusion that recommends which option Bodhi should choose.

Activity 1 – An electronic business report

Using the information provided produce a formal report for Bodhi that recommends

which business option to choose. This report must have a logical structure and use appropriate

business terminology throughout

2.0 METHODOLY

2.1 PRIMARY AND SECONDARY DATA COLLECTION METHOD

The researcher conducted a primary research through …….

Survey Monkey (free) – 10 questions (maximum 40 students)

Many official websites, online reference books, articles were used to research and gather

relevant data such as,….

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3.0. RESEARCH FINDINGS

3.1. OPTION 1 – BUYING AN EXISTING STREET FOOD CAFÉ IN THE CITY WITH

A PARTNER

WHAT IS STREET FOOD CAFÉ? WRITE ONE PARAGRAPH WITH HARVARD

STYLE IN-TEXT CITATIONS

Bodhi has seen a street food café for sale in in the city. It is an established business with

an existing customer base. The purchase price includes all refrigeration and cooking equipment,

but Bodhi would have to purchase new signs and outdoor seating.

The café is located in a busy street close to a train station. It is in a pedestrianised area

with room for outdoor dining and is surrounded by a variety of places to eat and drink. It is a

very popular destination for local residents, students, commuters and visitors at lunchtime and in

the evening.

Bodhi has $50 000 to invest, and has invited a business partner to also invest a further

$50 000. The partners would need to find an additional source of finance for the balance of the

start-up costs.

3.2. EXAMINATION OF THE BUSINESS PRINCIPLES AND PRACTICES THAT

DETERMINE BUSINESS DECISIONS

A. P1. Explanation of the factors that influence the development of the business idea

Write one paragraph about as a business advisor:

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  the interests and skills of the business owner

 Product innovation

 Gap (demand) in the market (niche market)

 Competitors (optional)

 Current trends (optional)

A. P2. Explanation of the factors that influence formulation (designing) of business idea

BUSINESS GROWTH:

 Development of new products (diversification)

 Changes to processes (efficiency, reduce the cost,)

 Changes to systems

 Changes to structure (functions, departments – impact on how it operates)

A. M1. Analysis of factors when formulating business decisions.

Marketing Mix 7Ps based on option 1:

 product

 price

 place

 promotion

 people

 process

 physical environment

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Market segmentation for option 1:

 Demographics

 Geographics

 Psychographics

 Behavioural

A. D1. Evaluation of the relative importance of different factors that impact the outcome.

Give your opinion how this company can achieve the brand awareness and break even at

the end of the first year.

 Break Even Analysis (MUST)

 Porter’s Five Forces Analysis (MUST)

 5Cs Analysis (optional)

 Ansoff Matrix (optional)

 BCG Matrix (optional)

 Product life cycle (optional)

3.3. REVIEW AND INTERPRETATION OF THE BUSINESS DATA AND

INFORMATION FOR OPTION 1

Start-up costs

Purchase of fully equipped café $160 000

New signs and outdoor seating $3 000

Initial marketing $1 000

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 Running costs year one

Cost of sales 30% of sales revenue

Expenses (wages, drawings and other costs) 55% of sales revenue

Other information year one

Predicted weekly sales volumes 210 meals

Average selling price each meal $11

Weekly fixed costs $1 000

Variable costs each meal $5.50

B.P3 Extraction appropriate data to aid decision making.

You can use the data you have collected from Survey Monkey (consumers’ habit)

 Point of Sale records (POS), page 7.30

 Customer feedback

 Website monitoring

 Competitors reports

 Security of the information

B.P4. Explanation of current context of a business organisation.

Option 1 Market trends. (use your assignment data about Market Trends, also use the

Option 1 Table)

B.M2 Analysis of the current context

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  SALES TURNOVER Projections (Line Graph, Bar chart, Table…) (MUST)

Average turnover of street food products over one week

period
8,000
7,000
6,000
5,000
Sales in USD

4,000
3,000
2,000
1,000
0
100 200 300 400 500
Number of goods sold

Turnover

FIGURE 1 TURNOVER OF THE PRODUCTS IN ONE WEEK

Give your analytical opinion based on the data.

B.D2 Evaluation of the current context

Based on the statistical information you have done, give your personal opinion with

justification, how they are related to increase the sales and profitability, and why?

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3.5. INTERPRETATION OF FINANCIAL INFORMATION USING RATIO ANALYSIS

C.P5. Explanation of the main influences on business performance

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C.P6 Explain the reasoning for formulating the outcome of a business decision

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3.6. RATIO ANALYSIS

Current ratio – current assets in relation to current liabilities

current assets
Current ratio=
current liabilities

Cash in the bank =

Inventory =

Total inventory =

Current assets =

Current liabilities:

Current ratio= ❑ =¿
❑

This means that, for every $1 ……. (use your book, page 7.48)

current assets−inventory
Liquid Capital Ratio=
current liabilitis

14 062−7,500 6 562
Liquid Capital Ratio=
6 950
=
6 950
= 0.94

Like the current ratio, ……. (use your book, page 7.48)

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 net profit before interest ∧tax
Profitability Ratio ( ROCE )= × 100
capital employed
(equity +non−current assets)

238
Profitability Ratio ( ROCE )= × 100 %=2.18 %
10 , 912
( 7,112+3,800 )

The Return on capital employed ….. (explain, use the book, and data above)

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C.M3 Assessment of the relative importance of business data

Efficiency ratios

costs of goods sold

Inventory turnover ratio=
average inventory

Analyse this data, use your book.

Trade payable days

trade payables ×365

Trade payable days=
cost of goods sold

Analyse this data, use your book.

Trade receivable days

trade receivable ×365

Trade receivable days=
credit sales
(revenue for 5 days )

Analyse this data, use your book.

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3.7. BREAK-EVEN ANALYSIS

¿ costs
Break −even point=
contribution per unit

Analyse this data, use your book.

Margin of safety

Analysis of a break-even chart

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3.9. INTERNAL RATE OF RETURN (IRR)

Explain, and analyse

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3.10. SWOT

CD. D3. Justify logically consistent case for the preferred outcome and its implications

Use appropriate decision making tools all the RATIO ANALYSIS AND SWOT.

EVALUATE ALL THE DATA ABOVE (P5. P6. M3. D3)

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OPTION 2 – BUYING A MOBILE FOOD TRUCK TO SELL STREET FOOD TO

OFFICE WORKERS

Alternatively, Bodhi could purchase a mobile food truck. He has seen a gap in the market for supplying

lunches to office workers. He plans to rent a space close to a large office building for the truck to trade

from. Bodhi would sell lunches daily.

Before the business could start to trade the truck would need to be fitted with the correct refrigeration,

cooking and safety equipment. Bodhi would also have to purchase some outdoor seating. The purchase of

the truck and installation of equipment would take one month.

Bodhi has $50 000 to invest and would need to find an additional source of finance for the balance of the

start-up costs. Bodhi plans to own and run this business alone.

Start-up costs

Purchase of mobile food truck $60 000

Equipment and outdoor seating $15 000

Initial marketing $500

Running costs year one

Cost of sales 33% of sales revenue

Expenses (drawings and other costs) 50% of sales revenue

Other information for year one

Predicted weekly sales volumes 140 lunches

Average selling price each lunch $7.50

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Weekly fixed costs $495

Variable costs each lunch $3.75

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3.12. ASSESSMENT OF THE KEY FACTORS AND RISKS FOR OPTION 2

A.P1 Explanation of the factors that impact the development of the business idea

Write one paragraph about as a business advisor:

A.P2 Explanation of the factors that influence formulation of business idea

A.M1. Analysis of factors when formulating business decisions.

Marketing Mix 7Ps based on option 2:

Market segmentation for option 2:

D1. Evaluation of the relative importance of different factors that impact the outcome.

Give your opinion how this company can achieve the brand awareness and customer

loyalty.

 Porter’s Five Forces Analysis (MUST)

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APPROPRIATE FINANCIAL FORECASTS

B.P3 Extraction appropriate data to aid decision making. (explanation)

Management information systems

Quality process

B.P4. Explanation of current context of a business organisation.

Option 2 (use your assignment data and Option 2 Table)

B.M2 Analysis of the current context

 SALES TURNOVER Projections (Line Graph, Bar chart, Table…) (MUST)

Average turnover for option 2

Average selling price - $ per item

Average sales per day – items

Sales period is – days

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 Average turnover
$12,000

$10,000

$8,000
Sales in USD

$6,000

$4,000

$2,000

$0
Day 1 Day 2 Day 3 Day 4 Day 5
Period of sales

Sales

Give your analytical opinion based on the data.

B.D2 Evaluation of the current context

Based on the statistical information on Option 2 you have done, give your personal opinion

with justification, and how they are related to increase the sales and profitability, and why?

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3.14. INTERPRETATION OF FINANCIAL INFORMATION USING RATIO ANALYSIS

Total expected income for option 2 is USD in 7 day period.

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C.P6 Explain the reasoning for formulating the outcome of a business decision

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3.15. RATIO ANALYSIS

Current ratio – current assets in relation to current liabilities

current assets
Current ratio=
current liabilities

Cash in the bank =

Inventory =

Total inventory =

Current assets =

Current liabilities:

Current ratio= ❑ =¿
❑

This means that, for every $1 ……. (use your book, page 7.48)

current assets−inventory
Liquid Capital Ratio=
current liabilitis

Liquid Capital Ratio= ❑ =

❑

Like the current ratio, ……. (use your book, page 7.48)

23
 net profit before interest ∧tax
Profitability Ratio ( ROCE )= × 100 %
capital employed
(equity +non−current assets)

The Return on capital employed ….. (explain, use the book, and data above)

24
C.M3 Assessment of the relative importance of business data

Efficiency ratios

costs of goods sold

Inventory turnover ratio=
average inventory

Analyse this data, use your book.

Trade payable days

trade payables ×365

Trade payable days=
cost of goods sold

Analyse this data, use your book.

Trade receivable days

trade receivbale ×365

Trade receivable days=
credit sales
(revenue for 5 days )

Analyse this data, use your book.

3.16. BREAK-EVEN ANALYSIS

¿ costs
Break −even point=
contribution per unit

Analyse this data, use your book.

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Margin of safety

Analysis of a break-even chart

3.18. INTERNAL RATE OF RETURN (IRR)

3.19 STEEPLE

CD. D3. Justify logically consistent case for the preferred outcome and its implications

Use appropriate decision making tools all the RATIO ANALYSIS AND STEEPLE.

EVALUATE ALL THE DATA ABOVE (P5. P6. M3. D3)

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4.0. CONCLUSION

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5.0. RECOMMENDATION

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REFERENCE LIST

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BIBLIOGRAPHY LIST

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APPENDICES

APPENDIX 1

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