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Study the information supplied and answer the questions which follow: Jim Ryan recently established a garage selling cars - Leaving Cert Business - Question 6 - 2009
Question 6
Study the information supplied and answer the questions which follow: Jim Ryan recently established a garage selling cars. His sole trader business trades under the... show full transcript
Worked Solution & Example Answer:Study the information supplied and answer the questions which follow: Jim Ryan recently established a garage selling cars - Leaving Cert Business - Question 6 - 2009
Step 1
Present the above information in the form of a bar chart.
Answer
To represent the sales of cars from January to June in a bar chart, the x-axis will show the months from January to June, while the y-axis will depict the number of sales. Each bar will correspond to the sales figures for each month:
- January: 50
- February: 40
- March: 35
- April: 30
- May: 35
- June: 40
The bars should be uniform in width and appropriately scaled to reflect the values. Additionally, a title 'Sales of Cars, Jan to June' can be added to provide context.
Step 2
Explain the term 'Sole Trader'.
Answer
A sole trader is an individual who owns and operates a business independently. This person is responsible for all aspects of the business, including making decisions, taking profits, and managing risks. Being a sole trader means having complete control over the business, yet it also entails personal liability for any debts incurred.
Step 3
Outline two disadvantages of a sole trader business.
Answer
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Unlimited Liability: A sole trader is personally liable for all business debts, meaning personal assets can be at risk if the business fails.
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Lack of Continuity: The business may cease to exist if the sole trader becomes unable to work or decides to close the business, limiting its longevity.
Step 4
Outline three advantages of conducting market research.
Answer
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Understanding the Target Market: Market research helps identify and understand the preferences and behaviors of potential customers, aiding in tailored product offerings.
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Informed Decision Making: It provides essential information regarding competition and market trends, allowing businesses to make better strategic decisions.
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Risk Reduction: By analyzing market conditions and customer feedback, businesses can mitigate risks associated with product launches and marketing strategies.
Step 5
Step 6
Step 7
Outline three items of information that the bank manager would require in assessing Jim's loan application.
Answer
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Ability to repay the loan: This could include a cash flow forecast demonstrating projected sales and expenses.
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Creditworthiness: A review of Jim's credit history to evaluate his reliability in repaying debts.
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Business Plan: A detailed plan outlining Jim's business model, including marketing strategies and financial projections, to demonstrate how he intends to operate and manage the business successfully.