Unit:

Introduction to Accounting and Economics

Winter 2024 – Winter 2027

Marking Scheme
Markers are advised that, unless a task specifies that an answer be provided in a
particular form, then an answer that is correct (factually or in practical terms) must be
given the available marks. If there is doubt as to the correctness of an answer, the relevant
NCC Education materials should be the first authority.

This marking scheme has been prepared as a guide only to markers and there will
frequently be many alternative responses which will provide a valid answer.

Each candidate’s script must be fully annotated with the marker’s comments (where
applicable) and the marks allocated for each part of the tasks.

Throughout the marking, please credit any valid alternative point.

Where markers award half marks in any part of a task, they should ensure that the
total mark recorded for the task is rounded up to a whole mark.

Marker's comments:

Moderator's comments:

Mark: Moderated mark: Final mark:

Penalties applied for academic malpractice:

Important note on word counts:
Assignments which exceed the wordcount by more than 10% will be marked but
markers must not read any words that exceed the 10% leeway, no marks will be
awarded, and no feedback provided for any text beyond this prescribed limit.
Markers must indicate on the script and in the marking breakdown the point at
which the limit is reached which is, by definition, where they have stopped marking.

General
Please check that the student has included a table of calculated ratios in the appendix. Students
are expected to refer to this analysis as they answer the tasks and to be appropriately rewarded.

Task 1 200 words 10 marks

Name and describe your chosen company including the industry within which it operates,
whether it is a national or multinational organisation and where it has a base or bases, its
main aims and objectives, products and services.

0-2 marks 3 marks 4-5 marks 6 marks 7-10 marks

Demonstrates a Demonstrates a Demonstrates a Demonstrates a Demonstrates a

basic limited consistent critical comprehensive
understanding of understanding of understanding of understanding of understanding of
the chosen the chosen the chosen the chosen the chosen
company, its aims company, its type, company, its company, its company, its
and/or objectives, base(s), aims or type, base(s), type, base(s), type, base(s),
products, and objectives aims or main aims and main aims and
services products, and objectives, objectives, objectives,
services products, and products, and products, and
services services services

Task 2 200 words 10 marks

Explain how your chosen company generates revenues and profits and compare its size
and influence with others in the same industry.

0-2 marks 3 marks 4-5 marks 6 marks 7-10 marks

Gives a basic Gives a limited Provides a Provides a well Provides a

explanation of explanation of how consistent explained detailed
how the company the company understanding of analysis of the explanation of the
generates generates the ways the way the company ways the
revenues and revenues and company generates company
profits with a profits with a generates revenues and generates
basic reference to limited analysis of revenues and profits and some revenues and
size or influence. size and/or profits and an indication and profits and a well
influence adequate comparison of thought out
assessment of business size and assessment of its
size and/or influence. size and influence
influence compared to
others in the
same industry.

Page 2 of 6
Introduction to Business © NCC Education Limited 2024 – 2027
Task 3 800 words 30 marks

Refer to the financial data provided in the document titled ‘Financial Data for Introduction
to Accounting and Economics’ and dated for the relevant assessment cycle. Assume that
this financial data is for your chosen company and reflects the type of business you have
described in Tasks 1 and 2.

Calculate the following ratios for each year to one decimal place. Use end of year figures
(note that insufficient detail is available to calculate averages)

a. Gross profit margin

b. Operating profit margin

c. Return on capital employed

d. Liquidity ratio

e. Acid test ratio

f. Inventories turnover period

g. Settlement period for trade receivables

h. Settlement period for trade payables

i. Gearing ratio

j. Interest cover

Include your calculations, in a table, in the appendix of your assignment. You will not
receive marks directly for calculating the ratios, but you must use them to support your
response to the following:

From the financial data provided and your calculation of ratios, identify trends and other
relevant measures of financial performance relevant to the health and progress of your
chosen company. Suggest reasons for the company’s performance eg profitability has
improved due to reduced operation costs and increased sales. Try to set your analysis in
the context and industry in which your chosen business operates.

Do NOT use financial data from your chosen company’s real financial reports. Refer
ONLY to the financial data provided.

Page 3 of 6
Introduction to Business © NCC Education Limited 2024 – 2027
 0-8 marks 9-11 marks 12-17 marks 18-20 marks 21-30 marks

Makes basic Provides limited Provides Provides sound Provides

references to calculations and adequate identification, coherent
financial ratios references to identification, selection and use identification,
financial selection and use of relevantly selection and use
performance of financial ratios categorised of financial ratios
and other financial ratios, to identify trends
measures of information about in liquidity,
performance. cashflow and/or profitability,
other relevant efficiency, long-
measures of term solvency,
performance. information about
cashflow, and
relevant
measures of
performance.

Demonstrates Demonstrates Demonstrates Demonstrates Demonstrates

basic limited adequate good analysis comprehensive
understanding of understanding of understanding of and analysis and
financial financial financial understanding of understanding of
performance and performance and performance and financial financial
trends trends trends performance and performance and
trends trends

Provides basic Provides limited Provides Provides critical Provides

interpretation of interpretation of consistent analysis and consistently
company health company health interpretation of interpretation of critical analysis
and progress company health company health and interpretation
and progress and progress of company
health and
progress

Task 4 800 words 30 marks

Explain the core concepts of economics which your company may use to help its decision
making.

Discuss the microeconomic and macroeconomic factors which affect demand for its
products or services in the short and medium term.

Describe the influence that your company has on the pricing of its products.

Page 4 of 6
Introduction to Business © NCC Education Limited 2024 – 2027
0-8 marks 9-11 marks 12-17 marks 18-20 marks 21-30 marks

Demonstrates Demonstrates Demonstrates Demonstrates Demonstrates

basic limited adequate good comprehensive
understanding of understanding understanding of understanding of understanding of
core concepts of of core concepts core concepts of core concepts of core concepts of
economics of economics economics economics economics

Demonstrates Demonstrates Demonstrates Demonstrates Demonstrates

basic limited adequate good comprehensive
understanding of understanding understanding of understanding of understanding of
microeconomic of microeconomic microeconomic and microeconomic and
and microeconomic and macroeconomic macroeconomic
macroeconomic and macroeconomic factors affecting factors affecting
factors macroeconomic factors affecting demand for demand for
factors demand products and products and
services in the services in the
short and/or short and medium-
medium-term term

Demonstrates Demonstrates Demonstrates Demonstrates Demonstrates

basic limited adequate good comprehensive
understanding of understanding understanding of understanding of understanding of
the pricing of of the pricing of the pricing of the pricing of the pricing of
products products products and the products and the products and the
influence of the influence of the influence of the
company company company

Task 5 500 words 20 marks

Use your analysis of your chosen company in the tasks, comprising the financial analysis
and understanding of the economic concepts and factors, to recommend and justify a
business strategy for your company for the next 5 years, focused on business growth and
sustainability.

0-5 marks 6-7 marks 8-11 marks 12-13 marks 14-20 marks
Provides a basic Provides a Provides a Provides a well Provides a
recommendation limited consistent explained comprehensive
of business recommendation recommendation recommendation recommendation
strategy of business of business of business of business
strategy strategy strategy strategy
Provides a basic Provides a Provides a Provides a well- Provides a
justification of limited consistent argued comprehensive
business justification of justification of justification of justification of
strategy business business business business
strategy strategy strategy strategy

Demonstrates Demonstrates Demonstrates Demonstrates Demonstrates

basic limited adequate good comprehensive
understanding of understanding understanding of understanding of understanding of
company needs of company company needs company needs company needs
for five years of needs for five for five years of for five years of for five years of
business growth years of business growth business growth business growth
or sustainability. business growth and and and
or sustainability. sustainability. sustainability. sustainability.
Page 5 of 6
Introduction to Business © NCC Education Limited 2024 – 2027
Learning Outcomes matrix

Task Learning Outcomes Marker can differentiate

assessed between varying levels of
achievement
1 1& 2 Yes
2 1& 2 Yes
3 1& 3 Yes
4 2 Yes
5 1& 2 Yes

Grade Descriptors

Learning Pass Merit Distinction

Outcome
Demonstrates Demonstrates good Demonstrates
adequate knowledge knowledge and comprehensive knowledge
Understand and understanding of understanding of the and understanding of the
the purpose of the subject matter subject matter subject matter
accounting
and its Provides consistent Provides critical Provides consistently
importance to interpretation and interpretation and critical interpretation and
a business for evaluation of relevant evaluation of relevant evaluation of relevant
sustainability information and ideas information and ideas to information and ideas to
and decision to complete tasks, complete tasks, address complete tasks, address
making address well defined well defined problems, and well defined problems, and
problems, and give give well explained and give well explained and
appropriate appropriate justification for highly appropriate
justification for conclusions justification for conclusions
Understand conclusions
core concepts Demonstrates
of economics Demonstrates Demonstrates sound ability comprehensive ability to
and their adequate ability to to review effectiveness of review effectiveness of
application for review effectiveness of methods, actions, and methods, actions, and
businesses in methods, actions, and results results
the real-world results
Can coherently identify,
Can adequately Can soundly identify, select, and use appropriate
identify, select, and select, and use appropriate information and/or skills,
use appropriate information and/or skills, methods, and procedures
Analyse the information and/or methods, and procedures to reach well explained and
financial health skills, methods, and to reach well explained and highly appropriate
and procedures to reach appropriate conclusions conclusions
performance appropriate
of a business conclusions
using Uses thorough and detailed
information Uses appropriate Uses detailed investigation investigation and/or
from financial investigation and/or and/or detailed analysis of consistently critical analysis
statements analysis of supplied supplied information to of supplied information to
and data information to inform inform conclusions inform well explained
conclusions conclusions

Page 6 of 6
Introduction to Business © NCC Education Limited 2024 – 2027
Statement and Confirmation of Own Work

A signed copy of this form must be submitted with every assignment.

If the statement is missing your work may not be marked.
For Level 7 assignments, please use the separate Level 7 Candidate
Statement of Own Work form instead of this one.

Student Declaration

I confirm the following details:

Candidate Name: Abdul Ahad

Candidate ID Number: 212 389

Qualification: L3b

Unit: Introduction to Economics and Accounting

Centre: SIPS

Word Count: 2494

I have read and understood both NCC Education’s Academic Misconduct Policy and the
Referencing and Bibliographies document. To the best of my knowledge my work has
been accurately referenced and all sources cited correctly.

I confirm that I have not exceeded the stipulated word limit by more than 10%.

I confirm that this is my own work and that I have not colluded or plagiarised any part of it.

Candidate Signature: AD

Date: 6/2/2025
 Unit:
Introduction to Accounting and Economics
Winter 2024 – Winter 2027

Important notes
 Please refer to the Assignment Presentation Requirements for advice on how
to set out your assignment. These can be found on the NCC Education
website. Hover over ‘About Us’ on the main menu and then navigate to
‘Policies and Procedures’ then scroll to the ‘Student Support’ area.
 You must read the NCC Education document Academic Misconduct Policy
and ensure that you acknowledge all the sources that you use in your work.
These documents are available on the NCC Education website. Hover over
‘About Us’ on the main menu and then navigate to ‘Policies and Procedures’
then scroll to the ‘Student Support’ area.
 You must complete the Statement and Confirmation of Own Work. The form
is available on the NCC Education website. Hover over ‘About Us’ on the
main menu and then navigate to ‘Policies and Procedures’ then scroll to the
‘Student Support’ area.
 Please make a note of the recommended word count as stated in the
brief. The maximum word count limit is the recommended work count
plus 10% leeway. Submissions which exceed the maximum word count
limit will be marked only up to the maximum word count limit. Any text
that exceeds the maximum word count limit will not be marked. You
must follow the note on word count as stated in the Submission
Requirements section of the brief.
 You must submit a paper copy and digital copy (on disk or similarly
acceptable medium). Media containing viruses, or media that cannot be run
directly, will result in a fail grade being awarded for this assessment.
 All electronic media will be checked for plagiarism.

This is an open-ended assignment. That means that the tasks will remain the same every
cycle until Winter 2027. However, the financial data that students use will change every
assessment cycle.

Ensure that your students have the correct financial data for the assessment cycle
to which they are registered before beginning work on this assignment.
Candidate checklist
Please use the following checklist to ensure that your work is ready for submission.

Have you read the NCC Education document Academic Misconduct Policy and
ensured that you have acknowledged all the sources that you have used in your X
work?
Have you completed the Statement and Confirmation of Own Work form and
attached it to your assignment? You must do this. X
Have you ensured that your work has not gone over or under the recommended
word count by more than 10%? X
Have you ensured that your work does not contain viruses and can be run directly? X

Page 6 of 6
Introduction to Accounting and Economics © NCC Education Limited 2024-2027
Index
Index----------------------------------------------------------------------page 1
Report on ConcernedApe------------------------------------------page 2
Overview------------------------------------------------------------------------------page 2
Aims and Objectives--------------------------------------------------------------page 2
Revenue and Profit Generation-----------------------------------page 3
Size and Industry Influence------------------------------------------------------page 3
Financial data analysis-----------------------------------------------page 4
Gross Profit----------------------------------------------------------------------------page 4
Operating profit margin------------------------------------------------------------page 4
Return on capital employed------------------------------------------------------page 4
Liquidity ratio-------------------------------------------------------------------------page 4,5
Acid test--------------------------------------------------------------------------------page 5
Inventories turnover period------------------------------------------------------page 5
Settlement period for trade receivables--------------------------------------page 5,6
Settlement period for trade payable-------------------------------------------page 6
Gearing ratio---------------------------------------------------------------------------page 6
Interest cover-------------------------------------------------------------------------page 6
Examining the economic factors of Concernedape for decision
making.---------------------------------------------------------------------page 7
Overview--------------------------------------------------------------------------------page 7
Principles analysis------------------------------------------------------------------page 7
Micro and Macroeconomics------------------------------------------------------page 7,8
Pricing influence --------------------------------------------------------------------page 8
Conclusion-----------------------------------------------------------------------------page 9
The next 5 years--------------------------------------------------------page 10
Appendix -----------------------------------------------------------------page 11
Gross Profit---------------------------------------------------------------------------page 11
Operating profit margin-----------------------------------------------------------page 11
Return on capital employed-----------------------------------------------------page 11
Liquidity ratio------------------------------------------------------------------------page 11
Acid test-------------------------------------------------------------------------------page 11
Inventories turnover period-----------------------------------------------------page 12
Settlement period for trade receivables-------------------------------------page 12
Settlement period for trade payable-------------------------------------------page 12
Gearing ratio--------------------------------------------------------------------------page 12
Interest cover-------------------------------------------------------------------------page 12

1
Report on ConcernedApe

Overview

ConcernedApe is the alias of Eric Barone an American indie game developer based in Seattle,
Washington renowned for creating Stardew Valley in 2016, a farming simulator role-playing
game inspired by classic games like Harvest Moon and Animal Crossing. Stardew Valley
combines farming, social simulation, exploration, and combat. Emphasizes player freedom in
cultivating crops, building relationships with the villagers, and exploring the procedurally
generated mines all in a cozy pixel-art aesthetic. Developed single-handedly for over 4 years,
ConcernedApe handled all the programming, pixel art and the music himself. Barone founded
ConcernedApe LLC, as both a studio and a brand to expand his creative ventures, the game
succeeded in selling over 41 million copies worldwide by 2024. And later selling over 40 million
copies in 2024 establishing ConcernedApe as a pioneer in indie gaming.

Aims and Objectives

ConcernedApe’s primary aim was to create a dream game that evoked the magic of his
childhood favorites while fostering a relaxing and creative environment. Post-launch driven by a
sense of duty to his players and to ensure that Stardew Valley becomes a classic, his objectives
shifted to maintaining Stardew Valley’s quality through free updates and engaging with the
community. He also seeks to innovate beyond just farming sims, as seen in his upcoming
project, The Haunted Chocolatier, a moodier game focused on chocolate-making and combat.

2
Revenue and Profit Generation:

ConcernedApe makes money by selling Stardew Valley on PC consoles and mobile systems
together with merchandise like apparel and collectibles. The game charges prices from $20 to
lower depending on regional pricing without microtransactions. Stardew Valley maintains its
long-term sales through other releases to new systems and free game updates. The studio
generates extra income through soundtrack sales as well as licensing agreements such as
board game partnerships and merchandise royalties. The company achieves exceptional profit
margins because Eric Barone maintains control of development costs through selective
outsourcing of porting tasks and marketing while avoiding expenses associated with large
teams.

Size and Industry Influence:

ConcernedApe achieves financial success comparable to mid-sized indie studios despite

operating with only one member. Small studios such as Chucklefish with Starbound and Team
Cherry with Hollow Knight can't match ConcernedApe's level of creative freedom and financial
success. Electronic Arts generates substantially more revenue than Stardew Valley but the latter
maintains unmatched profitability per employee. Concerned Ape achieves indie success through
hit ability to maintain artistic freedom while keeping commercial access while delivering Haunted
Chocolatier to build on his established fan base without sacrificing independence. He dominates
his niche through ongoing operations to gain community trust which strengthens its market
impact despite operating in an industry where scale often takes precedence.

3
Financial data analysis

Gross profit margin

Gross profit margin is a key indicator of a company's operational efficiency and pricing strategy,
as it shows how well the company manages its production costs relative to its sales revenue. In
the 1st year the margin was 28% while in the 2nd year the present was 26.5%. A higher gross
profit margin indicates that a company is keeping a larger portion of each sales dollar as profit.
To increase the profit margin you can increase your selling prices, reducing your cost of goods
sold and implementing cost-saving measures in production.

Operating profit margin

How efficiently a company manages its operational costs to generate profit from its core
business activities. In the 1st year the margin was 6% while in the 2 nd year the present was
1.6%. A higher operating profit margin signifies that a company can retain a larger portion of its
revenue as profit after covering operational expenses. So by this understanding the 1 st year is
has a higher profit then the 2 nd year. To increase operating profit margin, you can either increase
your revenue, or reduce your operating costs by streamlining processes, optimizing inventory
management, and identifying areas to cut expenses across your business operations.

Return on capital employed (ROCE)

ROCE is useful for comparing the profitability of different companies within the same industry,
as it considers the capital employed by each company. In the 1 st year the present was 17.2%
while in the 2nd year the present was 3.4%. A higher ROCE indicates that a company is
generating more profit per dollar of capital used, signifying efficient capital utilization. So by this
understanding the 1st year was better then the 2nd year at utilizing capital. Paying off debt,
thereby reducing liabilities. To avoid worsening your Return on Capital Employed and focusing
on strategies that maintain or increase profitability while managing capital efficiently.

Liquidity ratio

A company's liquidity, or how easily it can convert assets into cash to pay short-term debts. In
the 1st year the present was 2.1 while in the 2 nd year the present was 1.7. Higher ratio (above 1)

4
Indicates a company has enough current assets to cover its current liabilities, generally
considered a positive sign. So by this understanding the 1st year had a better ability to pay its
liabilities compared to the 2 nd year but its still able to pay its liabilities. To effectively managing
accounts receivable to collect payments promptly, minimizing unnecessary expenses,
optimizing inventory levels, managing debt structure by paying off liabilities or extending
payment terms, and closely monitoring cash flow to identify areas for improvement.

Acid test

A company's short-term liquidity, or its ability to pay immediate debts (dose not count
inventories). In the 1st year the present was 0.8 while in the 2 nd year the present was 0.8. A
higher acid-test ratio indicates a company is better equipped to meet its short-term financial
obligations. To better increasing your quick assets by collecting outstanding payments faster,
selling excess inventory, and reducing your current liabilities by paying off debts quickly. To
avoid worsening your liquidity ratio, focus on managing your current assets efficiently,
minimizing short-term debt, collecting receivables promptly, negotiating favorable payment
terms with suppliers, controlling overhead expenses, and avoiding unnecessary large purchases
that could drain your cash flow.

Inventories turnover period

Inventory turnover period refers to the amount of time it takes for a company to sell through its
entire inventory once. In the 1st year it will toke 55.3 days to sale everything while in the 2 nd year
it toke 63 days. A shorter inventory turnover period means a company is selling its inventory
faster, which is generally considered more efficient. This tells us that in the 1st year the inventory
was more valuable and sold easier or that their was a higher demand then the inventory for the
2nd year. To better inventories turnover period focus on accurately forecasting demand,
implementing a Just-In-Time inventory system, prioritizing fast-selling items, regularly reviewing
slow-moving stock, and utilizing effective marketing strategies to boost sales.

Settlement period for trade receivables

Its the average amount of time it takes for a company to collect payment from its customers
after selling goods or services on credit. In the 1 st year it will toke 11 days to receive the
payment for everything in credit while in the 2 nd year it toke 46.3 days. A shorter settlement
period indicates that a company is efficiently collecting payments from customers, contributing

5
to better cash flow management. This means that in the 1 st year the company was either better
at collecting the debt that was owed to them or there was less debt in the first place. To improve
the trade receivables streamline invoicing processes, offer multiple payment methods, and
provide incentives for early payment.

Settlement period for trade payable

The time frame between when a company receives an invoice from a supplier (the trade date)
and when they actually pay that invoice, essentially representing the time it takes for a business
to settle their debt to a vendor. In the 1 st year it will toke 51.4 days to deliver the payment while
in the 2nd year it toke 58.6 days. The increased delay could be because it of many reasons. To
improve your trade payable settlement period, focus on effectively managing cash flow by
negotiating favorable payment terms with suppliers, taking advantage of early payment
discounts when possible, prioritizing invoices based on due dates, automating payment
processes, maintaining accurate vendor data, and regularly reconciling accounts to ensure
timely payments and avoid late fees.

Gearing ratio

It is a financial metric that measures a company's level of debt compared to its equity,
essentially indicating how much of a company's operations are funded by borrowed money
rather than its own capital. In the 1st year the ratio was 0.5 while in the 2 nd year it was 1.1. A high
gearing ratio means a company has a large amount of debt relative to its equity, which can
indicate higher financial risk. This indicates that the 2 nd year was at a higher financial risk then
1st year. To improve your gearing ratio, focus on paying down debt, increasing equity, boosting
revenue, and reducing expenses.

Interest cover

It is a financial metric that measures how easily a company can pay its interest expenses on
outstanding debt. In the 1st year the ratio was 9.1 while in the 2 nd year it was 1. A higher ratio
signifies a company's greater capacity to pay interest on its debt, suggesting better financial
health. This indicates that the company was better able to pay their interest expenses on
outstanding debt. To improve your Interest Coverage Ratio, you need to either increase your
earnings before interest and taxes or decrease your interest expenses.

6
Examining the economic factors of Concernedape for decision
making.

Overview

ConcernedApe the creator of Stardew Valley applies economic principles like opportunity cost,
marginal analysis, and trade offs in his game development and business decisions, these guide
how he allocates his time and resources ensuring that each feature or update provides
maximum value in the eyes of his players and his own.

Principles analysis

Analyzing opportunity costs helps when deciding how to allocate his limited time and resources.
Because every hour spent coding, designing art, or debugging on Stardew Valley is time that
can be used elsewhere be it developing a different feature or even working on Haunted
Chocolatier. By weighing these costs against the expected benefits, he can decide which will
yield the highest net value for both his players and his wallet.

Marginal analysis helps decision-making by comparing the benefit of a small change to the cost
of that change, with the goal of maximizing the net benefit by identifying the point where
marginal cost equals the benefit. ConcernedApe continuously evaluates whether adding one
more feature, refining gameplay mechanics and releasing a content update for Stardew Valley
will improve overall player satisfaction and long‐term engagement or weather it is better to keep
working on Haunted Chocolatier.

Another key aspect is trade offs between quality, innovation and cost. In the fiercely competitive
game market, every design decision must consider not only the development cost but also how
the feature affects the game’s perceived value. This is where trade offs are primarily made.

Micro and Macroeconomics

The microeconomic demand for Stardew Valley is shaped by many factors. One is price
elasticity of demand. For digital games, a luxury leisure product this elasticity can vary widely,
for a loyal fan base or a game that has garnered critical acclaim a pricing strategy that allow a
higher margin is possible. But if the market is flooded with similar titles or if consumer budgets

7
are tight, a more elastic demand would require competitive pricing to sustain sales. In the short
term, micro-level factors such as seasonal trends for example, Steam summer sales and the
immediate consumer sentiment toward gaming experiences can cause a rapid shifts in the
demand. In the medium term evolving tastes, preferences and competitive pressures from other
game developers play a critical role. ConcernedApe must continuously monitor user reviews,
forum discussions, and social media trends to see demand and adjust development priorities.

Macroeconomic factors also influence demand though they work on a broader scale and over a
longer period of time. General economic conditions such as disposable income levels,
employment rates and consumer confidence also affect how much consumers will spend on
entertainment. In times of economic boom consumers might be more inclined to spend in luxury
leisure activities like gaming, while in a recession even a beloved game might decline in new
purchases. Inflation and interest rates further complicate the picture rising inflation can erode
the purchasing power of the customer while lower interest rates will encourage them to spend
more. Global technological trends such as improvements in digital distribution and the
proliferation of mobile gaming platforms shift the macroeconomic landscape by creating new
opportunities and altering consumer behavior.

Pricing influence

ConcernedApe’s influence on product pricing is an interesting study. As because he is an

independent developer he enjoys a degree of pricing power that is often not possible for larger
studios with more standardized products. His pricing decisions are not solely driven by cost
considerations instead he also factor in the perceived value of the game, the uniqueness of his
artistic vision and the community’s willingness to pay. For example, the initial price point for
Stardew Valley was set to be accessible enough to attract a broad audience, yet reflective of the
game’s quality and depth and this price is lower in a region that has a lower value to the droller.
In doing so, he considers both the price elasticity of his target market and the competitive
landscape. When demand is relatively inelastic due to strong brand loyalty or niche appeal there
is more room to adjust prices upward without a significant loss in the sales volume. Conversely
if data suggests that consumers are price sensitive he might opt for more competitive pricing or
employ tactics like offering limited-time discounts to stimulate demand on the Steam summer
sale.

8
Conclusion

In summary the economics underlying ConcernedApe’s approach to game development and

business decisions can be seen as a microcosm of economic theory. By applying the principles
of opportunity cost, marginal analysis and trade-off evaluations he optimizes his resource
allocation. Meanwhile an understanding of both microeconomic like price elasticity, consumer
preferences and competitive dynamics and macroeconomic trends like income levels, economic
cycles and technological change helps him anticipate market demand in the short and medium
term. Finally his influence on the pricing of his products demonstrates how independent creators
can leverage economic insights better then bigger companies to capture value, maintain
consumer goodwill and sustain long-term profitability in a rapidly evolving marketplace.

9
The next 5 years

In the next 5 years ConcernedApe must continue to focus on the production of his new product
The Haunted Chocolatier while continuing to support Stardew Valley and increasing the
soundtrack sales, licensing agreements and merchandise royalties. To retain sustainability and
to continue growing the business. As it would be unadvised to expand his business in any other
direction or to make a sequel as it would erode all his built up good will and not result in any
sustainability and only result in short term growth as compared to just focusing on the
production of The Haunted Chocolatier.

10
Appendix

Ratio Analysis

1. Gross Profit

Gross Profit / Revenue * 100

Year 1 : 3,500 / 12,500 * 100 = 28%
Year 2 : 2,850 / 10,750 * 100 = 26.5%

2. Operating profit margin

Operating profit / Revenue * 100

Year 1 : 750 / 12,500 * 100 = 6%
Year 2 : 180 / 10,750 * 100 = 1.6%

3. Return on capital employed

Operating profit / Capital employed (Total assets – Short term liabilities) * 100
Year 1 : 750 / (5,145 – 775) * 100 = 17.2%
Year 2 : 180 / (7,135 – 1,835) * 100 = 3.4%

4. Liquidity ratio

Current assets / Current liabilities

Year 1 : 1,645 / 755 = 2.1
Year 2 : 3,135 / 1,835 = 1.7

5. Acid test

Current assets - Inventory / Current liabilities

Year 1 : 1,645 – 1,000 / 755 = 0.8
Year 2 : 3,135 – 1,730 / 1,835 = 0.8

11
6. Inventories turnover period

Average inventor (previous inventory + current inventory / 2) / Cost of sales * 365

Average inventory (1,000 + 1,730 / 2 = 1,365)
Year 1 : 1,365 / 9,000 * 365 = 55.3
Year 2 : 1,365 / 7,900 * 365 = 63.0

7. Settlement period for trade receivables

Trade receivable / Credit sales * 365

*All sales are on credit
Year 1 : 375 / 12,500 * 365 = 11
Year 2 : 1,365 / 10,750 * 365 = 46.3

8. Settlement period for trade payable

Average trade payable / Cost of sales * 365

Average trade payable (727 + 1,810 / 2 = 1,268.5)
Year 1 : 1,268.5 / 9,000 * 365 = 51.4
Year 2 : 1,268.5 / 7,900 * 365 = 58.6

9. Gearing ratio

Total debits / Total equity

*Total debit = short borrowing + long term loans
Year 1 : 1,500 + 20 / 2,870 = 0.5
Year 2 : 2,850 + 14 / 2,450 = 1.1

10. Interest cover

EBIT / Interest expense

*EBIT = Earnings Before Interest and Tax
Year 1 : 750 / 82 = 9.1
Year 2 : 180 / 175 = 1

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 212 389_Abdul Ahad_ITAE.pdf
by Abdul Ahad

Submission date: 23-Feb-2025 04:50PM (UTC+0000)

Submission ID: 250812041
File name: 212_389_Abdul_Ahad_ITAE.pdf (465.01K)
Word count: 3007
Character count: 17971
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212 389_Abdul Ahad_ITAE.pdf
ORIGINALITY REPORT

12 %
SIMILARITY INDEX
8%
INTERNET SOURCES
0%
PUBLICATIONS
4%
STUDENT PAPERS

PRIMARY SOURCES

1
fastercapital.com
Internet Source 3%
2
Submitted to London School of Business and
Finance
1%
Student Paper

3
www.rigipublication.com
Internet Source 1%
4
www.fastercapital.com
Internet Source 1%
5
Submitted to Regenesys Business School
Student Paper 1%
6
wellnessmonger.medium.com
Internet Source 1%
7
Submitted to Leeds Metropolitan University
Student Paper 1%
8
www.vintti.com
Internet Source 1%
9
Submitted to Southern New Hampshire
University - Continuing Education
1%
Student Paper

10
openaccess.nhh.no
Internet Source 1%
11
Submitted to Colorado Technical University
Online
<1%
Student Paper
12
Submitted to Institute and Faculty of
Actuaries
<1%
Student Paper

13
www.bizmanualz.com
Internet Source <1%
14
fourweekmba.com
Internet Source <1%

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