GCSE

Business

J204/02: Business 2: operations, finance and influences on

business

General Certificate of Secondary Education

Mark Scheme for June 2023

Oxford Cambridge and RSA Examinations

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support, which keep pace with the changing needs of today’s society.

This mark scheme is published as an aid to teachers and students, to indicate the requirements
of the examination. It shows the basis on which marks were awarded by examiners. It does not
indicate the details of the discussions which took place at an examiners’ meeting before marking
commenced.

All examiners are instructed that alternative correct answers and unexpected approaches in
candidates’ scripts must be given marks that fairly reflect the relevant knowledge and skills
demonstrated.

Mark schemes should be read in conjunction with the published question papers and the report
on the examination.

© OCR 2023

Oxford Cambridge and RSA Examinations

J204/02 Mark Scheme June 2023

PREPARATION FOR MARKING

RM3

1. Make sure that you have accessed and completed the relevant training packages for on-screen marking.

2. Make sure that you have read and understood the mark scheme and the question paper for this unit.

3. Log-in to RM3 and mark the required number of practice responses (“scripts”) and the required number of standardisation responses.

YOU MUST MARK 5 PRACTICE AND 10 STANDARDISATION RESPONSES BEFORE YOU CAN BE APPROVED TO MARK LIVE
SCRIPTS.

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J204/02 Mark Scheme June 2023

MARKING INSTRUCTIONS – FOR MARKING ON-SCREEN

1. Mark strictly to the mark scheme.

2. Marks awarded must relate directly to the marking criteria.

3. The schedule of dates is very important. It is essential that you meet the 50% and 100% deadlines. If you experience problems, you must
contact your Team Leader (Supervisor) without delay.

4. If you are in any doubt about applying the mark scheme, consult your Team Leader by telephone or the RM3 messaging system, or by email.

5. Crossed Out Responses

Where a candidate has crossed out a response and provided a clear alternative then the crossed out response is not marked. Where no
alternative response has been provided, examiners may give candidates the benefit of the doubt and mark the crossed out response where
legible.

Multiple Choice Question Responses

When a multiple choice question has only a single, correct response and a candidate provides two responses (even if one of these responses
is correct), then no mark should be awarded (as it is not possible to determine which was the first response selected by the candidate).

Contradictory Responses
When a candidate provides contradictory responses, then no mark should be awarded, even if one of the answers is correct.

Short Answer Questions (requiring only a list by way of a response, usually worth only one mark per response)
Where candidates are required to provide a set number of short answer responses then only the set number of responses should be marked.
The response space should be marked from left to right on each line and then line by line until the required number of responses have been
considered. The remaining responses should not then be marked. Examiners will have to apply judgement as to whether a ‘second response’
on a line is a development of the ‘first response’, rather than a separate, discrete response. (The underlying assumption is that the candidate
is attempting to hedge their bets and therefore getting undue benefit rather than engaging with the question and giving the most relevant/correct
responses.)

Short Answer Questions (requiring a more developed response, worth two or more marks)
If the candidates are required to provide a description of, say, three items or factors and four items or factors are provided, then mark on a
similar basis – that is downwards (as it is unlikely in this situation that a candidate will provide more than one response in each section of the
response space.)

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J204/02 Mark Scheme June 2023

Longer Answer Questions (requiring a developed response)

Where candidates have provided two (or more) responses to a medium or high tariff question which only required a single (developed)
response and not crossed out the first response, then only the first response should be marked. Examiners will need to apply professional
judgement as to whether the second (or a subsequent) response is a ‘new start’ or simply a poorly expressed continuation of the first
response.

6. Award No Response (NR) if:

• there is nothing written in the answer space.

Award Zero ‘0’ if:

• anything is written in the answer space and is not worthy of credit (this includes text and symbols).

Team Leaders must confirm the correct use of the NR button with their markers before live marking commences and should check this when
reviewing scripts.

7. The RM Assessor comments box is used by your team leader to explain the marking of the practice responses. Please refer to these
comments when checking your practice responses. Do not use the comments box for any other reason.
If you have any questions or comments for your team leader, use the phone, the RM Assessor messaging system, or e-mail.

8. Assistant Examiners may send a brief report on the performance of candidates to your Team Leader (Supervisor) by the end of the marking
period.

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J204/02 Mark Scheme June 2023

9. Annotations

Annotation Meaning Annotation Meaning

Knowledge (AO1a)
Correct - 1 mark awarded K

Incorrect U Understanding (AO1b)

Benefit of doubt – mark awarded Application (AO2)

Not answered question – question is either
omitted or answer is not relevant to the question Analysis (AO3a)
asked

Too vague – no reward Evaluation (AO3b)

Repetition – credit already given or answer Not sure what the candidate is trying to say
repeats what is in the question or stem
Not used text – answer does not make use of Own figure rule
the context so no application mark

Noted but no credit given

Blank page (only use on Q18e)

Highlighting is also available to highlight any particular points on the script.

ARA – Any Reasonable Answer - Where ARA is indicated within the Guidance column for any item on this mark scheme, examiners must
accept any reasonable answer that in their professional opinion is as worthy of merit as those indicated on the final mark scheme.
However, examiners should liaise with their Team Leaders/Principal Examiner wherever there remains any doubt as to whether or not
a response (or part-response) should be awarded.

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J204/02 Mark Scheme June 2023

Question Answer Marks Assessment Objective

SECTION A
1 D 1 2
2 D 1 1a
3 C 1 2
4 B 1 2Q
5 D 1 2PS
6 B 1 2Q
7 B 1 2Q
8 C 1 1b
9 A 1 2
10 B 1 1a
11 B 1 2Q
12 C 1 2Q
13 D 1 2
14 C 1 1b
15 C 1 2Q

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J204/02 Mark Scheme June 2023

Question Answer Marks Guidance

SECTION B
16 a (i) Explain one production process a business may use when 2 One mark for identifying the production
making its products. AO1a 1 process.
AO1b 1

Answers may include: One further mark for explaining the

• Batch – groups of a product made together. process.
• Flow / Mass – continuous / production line.
• Job – one at a time / individually made. Answers do not need to relate to Zara.

Exemplar response
Batch production (1) which is when a group of similar products are
made together (1).

(ii) Explain one method that a business could use to ensure the 2 One mark for identifying a method to
quality of its products. AO1a 1 ensure quality.
AO1b 1

Answers may include: One further mark for explaining the

• Quality control – end of the production process / inspection / method.
before being sold
• Quality assurance – during the production process / by the
production workers (whole business)
Answers do not need to relate to Zara.
Exemplar response
Quality control (1) which is where an inspector would check a sample
of the finished goods (1).

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J204/02 Mark Scheme June 2023

Question Answer Marks Guidance

b Analyse one reason why keeping variable costs low may reward 3 One mark for understanding a reason why
Zara’s owners. AO1b 1 lower costs reward an owner.
AO2 1
AO3a 1
Understanding may include: No further marks can be gained without
• Lower costs could lead to lower total costs / better profits / understanding.
margins.
• Lower costs could enable a reduction in price. One further mark for application of
• Leaves more money available for other needs. understanding to Zara, using evidence
• Lowers the break-even level of output. from the text.

Application may include: One further mark for an analysis of how

• Large quantities of fabric lower variable costs help reward an owner.
• Suppliers in Europe / factories in Europe, Asia & Africa
• 2,270 stores
• Online sales increased
No reward for answers which suggest that
• Fast delivery / lead time of 15 days controlling variable costs helps to increase sales
revenue.
Analysis may include:
• May lead to owners receiving more money / dividends.
• Allows the business to expand / investment in growth / improve
the stores. A change in profits is part of understanding – any
analysis comes from what the business does with
Exemplar response that profit.
It may lead to better profit margins (1) if Zara reduces variable costs
from buying large quantities of fabric (APP). This may mean that
Zara’s owners receive more dividends (1).

ARA

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J204/02 Mark Scheme June 2023

Question Answer Marks Guidance

c (i) Calculate the percentage decrease in Zara’s sales revenue 2 Two marks for correct answer (with or
between 2019 and 2020. Show your workings. AO2 2 without workings).

19,954m -14,129m = 5,825m (1) Negative sign is not required as question states it
is a decrease. Percentage sign not required.
5,825m/19,954m x 100 = (-)29.2% (1) [OFR]
Accept 29% or any other level of accuracy.

(ii) Explain one possible advantage to a business of selling its 2 One mark for identifying an advantage of
products via e-commerce. AO1b 2 selling via e-commerce.

Answers may include: One further mark for explaining the

• Sell worldwide / wider audience. advantage.
• Open all the time.
• Professional look at little cost / easier to display products
online.
• Lower operating costs. Answers do not need to relate to Zara.

Exemplar response
A business selling online may have lower operating costs (1) because An answer of ‘selling more products’ without any
it does not need to have an expensive location to sell from (1). link to e-commerce is TV.
ARA

d (i) Identify two roles of the procurement function in a business. 2 One mark for each correct role of the
AO1a 2 procurement function.
Answers may include:
• identifying goods and services to buy / finding materials
• ordering or purchasing goods and services Answers do not need to relate to Zara.
• identifying or choosing suppliers
• receiving deliveries from suppliers

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J204/02 Mark Scheme June 2023

Question Answer Marks Guidance

(ii) Evaluate the importance to Zara of having reliable suppliers in the 7 Use the level of response marking grid to
supply chain for its clothing. AO2 2 assess skill levels.
AO3a 2
AO3b 3
Application may include: Annotate as:
• Global fashion brand Up to two marks for application to Zara
• Best known for speed and frequency Up to two marks for analysis
• Large quantities of fabric ordered Up to three marks for evaluation
• Suppliers from Europe, Asia, Africa
• Sales fell by 29% [OFR] in 2020 NB: Context must be used to be awarded as
• 2270 stores and online shop application.
• Changing clothing designs every two weeks/15 days. Analysis must be a business facing impact.
• Delivered to Spain/Spanish factories.
• Highly responsive supply chain. For strong evaluation i.e., the full three marks, the
evaluation must be contextual.
Analysis may include:
• Reliable suppliers ensure products are made to the expected
quality and distributed to its shops/online distribution centres
within the expected time frame.
• Without reliable suppliers sales/profits would go down as they
do not have the clothing to sell to its customers.
• Zara’s reputation (brand image) may suffer if there are delays
to online purchases, shops not being stocked.
• If supplies are not of appropriate quality, this will negatively
impact sales and profits.

Evaluation may include:

• Essential for Zara as a leader in ‘fast fashion’.
• The relative influence/impact of different factors, e.g., incomes
may be lower therefore no matter how reliable Zara’s suppliers
are if customers do not have a lot of money sales will be lower
regardless.

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J204/02 Mark Scheme June 2023

Question Answer Marks Guidance

• Reliable suppliers are important but so is branding, and the
businesses ability to ensure each of the 4Ps of the marketing
mix complement each other.

Exemplar response
Given that Zara has 2270 stores (APP) it is important that it has reliable
suppliers to ensure products are available in every shop, otherwise the
business will miss out on sales (AN).

If suppliers are not reliable, Zara will be unable to launch new designs
every 2 weeks (APP) so that it will lose its USP (AN).

Having reliable suppliers is important to Zara (EVAL). Without reliable

suppliers they will not be able to provide the service which they are
known for (EVAL). Zara’s competitors change designs every 2 to 3
months and so Zara needs to be better than that to maintain its
competitive advantage (EVAL).

ARA

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J204/02 Mark Scheme June 2023

16 d (ii) Evaluate the importance to Zara of having reliable suppliers in the supply chain for its clothing.

Application Analysis Evaluation

(2 marks) (2 marks) (3 marks)
Strong 3 marks

A justified judgement about the importance to Zara of

having reliable suppliers, using the evidence.

2 marks [EVAL]
2 marks [EVAL]
Two (business-facing) pieces of [EVAL]
Two uses of context analysis of having reliable suppliers.
Good 2 marks
[APP] [AN]
[APP] [AN] A justified judgement as to the importance of having
reliable suppliers.

[EVAL]
[EVAL]

Limited 1 mark
1 mark 1 mark
One (business-facing) piece of
One use of context analysis of having reliable suppliers. A judgement about the importance of reliable suppliers.

[APP] [AN] [EVAL]

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J204/02 Mark Scheme June 2023

Question Answer Marks Guidance

17 a Identify two ethical considerations a business may have. 2 One mark for each correct ethical
AO1a 2 consideration, up to a maximum of two.
Answers may include:
• Treatment of workers (e.g., fair wage, child labour, modern
slavery) Answers do not need to relate to AZ.
• Treatment of suppliers (e.g., fair prices, payment terms)
• Treatment of customers No reward for environmental considerations (e.g.,
• Ethical marketing factors less use of fertilisers) or issues which are legal
• How to source materials (e.g., ethical credentials, fair trade, requirements (e.g., pay the minimum wage,
sustainability). discrimination, working conditions, illegal
advertising).

ARA
b State two reasons why quality in the production of goods is 2 One mark for each correct reason, up to
important to a business. AO1a 2 a maximum of two.

Answers may include:

• Reputation. Answers do not need to relate to AZ.
• Brand image.
• Competitiveness.
• To satisfy customer needs (sell more).
• Repeat purchasing. No reward for references to profit
• Able to set a higher price.
• Making products desirable.
• No need to recall / return / waste products.
• To satisfy any legal requirement.
ARA

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J204/02 Mark Scheme June 2023

Question Answer Marks Guidance

c Analyse one reason why it is important to AZ that its call centre 3 One mark for the identification of a reason
AO1b 1 why call centre employees need good
employees have good product knowledge. AO2 1
AO3a 1 product knowledge.
Understanding may include:
• They can offer correct advice about products. No further marks can be gained without
• They can deal with customer queries. understanding.
• Can increase customer satisfaction.
One further mark for application of
• The customer trusts the business / product.
understanding to AZ, using evidence from
the text.
Application may include:
• Operates in over 100 countries.
One further mark for analysis of why good
• Develops treatments for a range of diseases.
product knowledge is important to a
• Code of ethics is important to AZ. business.
• Provides high quality products / service.
• Sells to doctors (medical professionals), hospitals, and
governments.
• Switched from salespeople visiting doctors to sell its products
to using employees working at a call centre. Accept an answer which implies that the customer
may be an individual patient, but only award APP
Analysis may include: if it is correct for AZ.
• If employees can / cannot answer questions sales / profits will
increase / decrease. A basic reference to the product (medicines and
• Could affect reputation. vaccines) is not enough for APP.
• May affect the money available to research and develop new
medicines.

Exemplar response
The call centre employees need to be able to advise on what is best
for customers to buy (1). The products are being sold to qualified
medical professionals (APP) therefore if they cannot answer
questions sales and profits may be reduced (1).
ARA

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J204/02 Mark Scheme June 2023

Question Answer Marks Guidance

d Calculate AZ’s gross profit margin for 2021. 2 Two marks for correct answer (with or
AO2 2 without working).
£24,980 / £37,417 x 100 = 66.8%
One mark for setting out the correct calculation.

Accept 67%, 66.76%, 66.7% (or the full number)

Maximum one mark if incorrect or no units.

e Explain one way technology might affect production at AZ. 2 One mark for a way technology can
AO1b 1 influence production.
AO2 1
Answers may include:
• Any reference to automation, ICT, robotics etc. No further mark can be gained without
• Increased production / productivity / can work 24/7 understanding.
• Lower unit costs
One further mark for applying to AZ.
• Fewer mistakes / higher quality levels
• Can slow production down if training is needed.
• Increased chance of breakdowns.

• Exemplar response
• Automation can increase productivity (1) in the production of No reward for answers which are NOT about
vaccines (APP). production (e.g., use of e-commerce.)
•
ARA

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J204/02 Mark Scheme June 2023

Question Answer Marks Guidance

f (i) Analyse one advantage and one disadvantage to AZ of 6 Advantage
operating as a multinational company. AO1b 2 One mark for understanding of a possible
AO2 2
AO3a 2 advantage of operating as a multinational.
Application may include:
• Operates in over 100 countries. No further marks can be gained without
• Sells its products worldwide. understanding.
• Has a code of ethics at the centre of everything.
• 75,000 employees worldwide. One further mark for application of
• Three research and development centres. understanding to AZ, using evidence from
• Develops treatments for ranges of diseases. the text.
• Meets needs of customers at a lower cost.
One further mark for analysis of the given
Advantages of operating as a multinational advantage for a business.
Understanding may include:
• Higher sales (revenue)
• Spread risk.
• Access to skilled workers in other countries
• Lower costs labour / land/ technology
• Benefits of competition
• Lower legal or ethical standards in other countries. Do not reward answers which consider being an
MNC to be only about selling internationally.
Analysis may include:
• Setting up where there is demand for the products making
distribution easier.
• Higher profits
• Larger dividends for shareholders.
• Higher market share
• More money to invest (make the business more competitive).
• Growth of ideas and innovation
• Increased efficiency.

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J204/02 Mark Scheme June 2023

Question Answer Marks Guidance

Disadvantages of operating as a multinational
Understanding may include: Disadvantage
• Various legal differences / regulatory requirements in each One mark for understanding of a possible
country disadvantage of operating as a
• May become too large – difficult to manage. multinational.
• Transport costs increase moving the product around the
globe to markets. No further marks can be gained without
• Costs of operating across a large number of countries. understanding.
• Worldwide opposition to multinational businesses
• Communication – could be difficult due to language / cultural / One further mark for application of
time differences. understanding to AZ, using evidence from
• Will face more competition. the text.
• Will have to deal with currencies / exchange rate fluctuations.
One further mark for analysis of the given
disadvantage for a business.
Analysis may include:
• May have an impact on quality control due to co-ordination
around the globe.
• May lead to decreased profits / margins.
• Effect on brand identity while at the same time customizing Do not reward answers which consider being an
the brand message to appeal to the local cultures. MNC to be only about selling internationally.

Exemplar response
One advantage is that AZ is likely to achieve higher sales (1) as AZ
sells its medicines worldwide (APP). This should mean larger profits
which can be used to reinvest in developing new medicines (1).

One disadvantage is that AZ might experience communication

problems (1). This is because they operate in over 100 countries
(APP) in different time zones. This may reduce efficiency and have
an impact on profit margins (1).

ARA

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J204/02 Mark Scheme June 2023

Question Answer Marks Guidance

(ii) Recommend whether AZ should continue to operate as a 3 One mark for a basic judgement whether
multinational company. AO3b 3 AZ should continue to operate as a
multinational company.
A full answer needs a justified judgement based on the context.
Plus
Further analysis of the advantages / disadvantages should not be One further mark for justification of
rewarded but can form part of a candidate’s justification. whether AZ should continue to operate as
a multinational with no use of context.
Exemplar response or
AZ should continue to operate as a multinational (1). If AZ do not Two further marks for justification of whether AZ
operate globally, they would be restricted on how much profit they should continue to operate as a
can make and therefore how much they can reinvest (1). This would multinational with use of context.
restrict AZ’s ability to develop new medicines (1) at its 3 research
and development centres (APP).
ARA

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J204/02 Mark Scheme June 2023

Question Answer Marks Guidance

18 a State one reason why cash is important to a business. 1 One mark for a correct reason why cash
AO1a 1 is important.
Answers may include:
• To be able to pay short term debts / loans / finances.
• To pay short-term expenses, e.g., heating / lighting / rent / No reward for answers which linked to long-term
raw materials / supplies / wages. issues (e.g., expansion).
• To help with liquidity.
• To ease cash-flow problems.
ARA
b (i) Analyse how GK can use the break-even level of output for its 3 One mark for understanding how break-
Deluxe range. AO1b 1 even output can be used.
AO2 1
AO3a 1
Understanding may include: No further marks can be gained without
• To identify when total costs equal total revenue. understanding.
• To identify when there is no profit or loss made / how many
you need to sell at the current price. One further mark for application of
• To know when a loss turns into a profit situation. understanding to GK, using evidence
• Can use break-even diagrams. from the text.
• Can set sales targets.
One further mark for analysis of the use of the
Application may include: break-even level of output for a business.
• Fixed costs = £250,000; Price = £15,000; Variable cost =
£6,380 per unit
• 29 kitchens to break even.
An answer may achieve understanding and
• Concerns about future economic climate.
application together. For example, “Break-even
• Fall in consumer incomes & unemployment forecast.
output means that GK needs to sell 29 kitchens to
cover their costs.” This shows understanding of
Analysis may include:
revenue equalling costs and contains application
• Can calculate the margin of safety. with reference to 29 being the break-even output
• Can calculate profit levels at different outputs. for this product.
• May be used when attracting finance or investors.

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J204/02 Mark Scheme June 2023

Question Answer Marks Guidance

• Will allow business to make decisions about changing price An answer of “it shows how many a business
and/or costs. needs to sell to break-even” does not show
• May encourage the business to spend more on advertising / understanding as it is tautological.
promotion.

Exemplar response
Break-even shows when the business has covered all of its costs but
has not yet made a profit (1). GK has a break-even output of 29
kitchens a year (APP) which can be used to set a target for the sales
team to sell more than this number (1).
ARA
(ii) Analyse one limitation to GK of using break-even when making 3 One mark for understanding a limitation of
decisions about its Deluxe range. AO1b 1 using break-even.
AO2 1
AO3a 1
Understanding may include: No further marks can be gained without
• Data is estimated. understanding.
• Number of competitors may change.
• The business may make promotional offers. One further mark for application of
• Costs may change. understanding to GK, using evidence from
• External factors are ignored / may change. the text.
• Qualitative / non-quantifiable issues are not considered.
• Takes no account of whether customers will buy the product. One further mark for analysis of the
limitation of using break-even for decision-making
Application may include: for a business.
• Reference to the cost/price data provided.
• Concerns about the economic climate.
Answers which suggest the data is wrong or not
• Forecast fall in consumer incomes. specific enough are TV.
• Unemployment likely to fall (from 4% to 3.1%.)
• GK sells a high-quality luxury product.

Analysis may include:

• May need to make decisions about costs and / or prices to
overcome any uncertainty in the data.

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J204/02 Mark Scheme June 2023

Question Answer Marks Guidance

• May find that targets must be constantly changed.
• Price changes may not lead to a change in revenue.

Exemplar response
GK’s suppliers of wood may increase their prices (1). As GK makes
luxury (APP) kitchens this may have a significant effect on the break-
even output so that GK will have to increase its sales targets (1).
ARA
c (i) Analyse one impact on GK of the predicted fall in consumer 3 One mark for understanding about a fall in
incomes. AO1b 1 consumer incomes.
AO2 1
AO3a 1
Understanding may include: No further marks can be gained without
• Lower consumer spending / cannot afford products. understanding.
• Customers have less money to spend.
• Less disposable income / spare money. One further mark for application of understanding
• Spend more on necessities. to GK, using evidence from the text.

Application may include: One further mark for analysis of an impact

• The range is £15,000. on a business of a decrease in consumer
• Kitchens are luxury items / expensive. income.
• Cannot sell 29 kitchens.
• GK sells in south-east (where consumer incomes are falling).

Analysis may include:

• Decreased demand / revenue / profits.
• May not achieve break-even.
• Less money available for wages, investment, etc.
• Need to reduce prices.
• Cannot buy stock.

Exemplar response
Customers have less income to spend (1) and given GK’s kitchens
are priced at £15,000 (APP) it is likely sales will decrease (1).
ARA

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J204/02 Mark Scheme June 2023

Question Answer Marks Guidance

(ii) Analyse one impact on GK of the forecast change in the 3 One mark for understanding about a fall in the
unemployment rate shown in Table 1. AO1b 1 unemployment rate.
AO2 1
AO3a 1
Understanding may include: No further marks can be gained without
• Less easy to recruit employees. understanding.
• More consumers have an income.
One further mark for application of understanding
Application may include: to GK, using Table 1.
• Unemployment rate expected to fall (by 0.9% over 3 years).
• Any use of individual data comparing the rate to 2022. One further mark for analysis of an impact on a
business of a fall in the unemployment
Analysis may include: rate.
• Wages may increase.
• Higher recruitment costs.
• Unable to complete jobs (on time).
• Increased demand / revenue / profits.
Answers MUST consider the fall in the
• Get closer to (or exceed) break-even.
unemployment rate
Exemplar response
Forecasted decrease in the unemployment rate by 0.9% (APP) may
mean consumers have more income (1). This may lead to an
increase in demand (1).

ARA
(iii) Recommend whether the predicted fall in consumer incomes or 3 One mark for a basic judgement whether the fall in
the forecast change in the unemployment rate will have the AO3b 3 the unemployment rate or the fall in consumer
greatest impact on GK. incomes will have the greatest impact.

A full answer needs a supported judgement. Plus

One further mark for justification by
Further analysis of the two variables should not be rewarded but can contrasting the impact of the fall in the
form part of a candidate’s justification. unemployment rate and the fall in
consumer incomes, with no use of context.

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J204/02 Mark Scheme June 2023

Question Answer Marks Guidance

Exemplar responses or
Consumer incomes falling will have a bigger impact (1). As GK sells Two further marks for justification by contrasting
expensive non-essential products (APP) a fall in consumer incomes the impact of the fall in the
will reduce demand whereas the decrease in unemployment may unemployment rate and the fall in
mean people only have low-paid jobs so still cannot afford GK’s consumer incomes, with use of context.
kitchens (1).

The fall in unemployment rate will have little impact immediately (1)
as it will take 3 years and only fall by 0.9% (APP). Therefore, a fall in
consumer incomes for 2 years will have the greater impact (1).

ARA
d Evaluate how useful the financial data in Table 2 is to GK’s 9 Use the level of response marking grid to
* stakeholders. AO1a 1 assess skill levels.
AO1b 1
AO2 2
Knowledge may include: AO3a 2 Annotate as:
• Financial data includes financial statements, cash flow AO3b 3
One mark for knowledge of financial data
forecasts, break-even predictions, ARR, profit & loss / One mark for understanding of financial data
margins etc. Up to two marks for synoptic application*
• Any item of financial data not mentioned in Table 2 (excludes
Up to two marks for analysis
net profit, cash at bank, loans.)
Up to three marks for evaluation
Understanding may include:
• Cost and revenue data is used for cash flow forecasting. *Application refers to synoptic application only.
• Profit and loss data is used to judge success.
• Profit margins and ARR used to help understand the
profitability of the business. For strong evaluation i.e., the full three marks, the
evaluation must be contextual.
• Financial data can be used to assess the stability or success
or long-term future of a business.
• Business decisions need financial data to help understand if
they will be successful or not.
No reward for discussions which simply refer to
‘stakeholders’ – they need naming.
Application may include:
• Owners / shareholders

23
J204/02 Mark Scheme June 2023

Question Answer Marks Guidance

• Employees
• Managers
• Customers
• Suppliers
• Banks / lenders
• Local community
• Government

Analysis may include:

• Employees will want to know if their job is safe/secure and if
profitable negotiate higher wages.
• Managers will use financial information to make decisions
about the future direction of the business, e.g., expansion or
new products.
• Customers will want to make sure they are getting a fair price
and that the business will not go out of business.
• Suppliers will want to make sure that they get paid, and the
business will continue as a customer.
• Local community will be interested in the donations to the
foodbanks.
• Banks / lenders will want to know how safe it is to lend money
to the business.
• The government will want to know that GK is paying the right
amount of taxes.

Evaluation may include:

• Financial information is / is not useful when making business
decisions or judging performance.
• Other factors may be more or just as important, such as
competition, shareholder views, work practices.
• External factors, such as UK income and employment levels,
may affect the financial data or how it is interpreted.

24
J204/02 Mark Scheme June 2023

Question Answer Marks Guidance

• A judgement about why a named stakeholder may find the
data particularly useful or why one named stakeholder will
find it more useful than another.

Exemplar response
Financial data includes financial statements and forecasts (K). These
can be used to help judge the performance of a business (U).

Employees (APP) may find the financial information useful as they

will be concerned that GK is making able to pay their wages in the
future (AN).

Another stakeholder who might find the financial information useful is

the local community (APP) who will be interested whether the
donations GK make to the food bank may stop if profits fall (AN).

GK’s stakeholders will find the financial information useful (EVAL).

Although this may be limited, as most financial information is
published more than a year after the period it occurred (EVAL). A lot
may have changed since GK donated £8,500 to the Brighton food
banks in 2022 (EVAL).

ARA

25
J204/02 Mark Scheme June 2023

18d* Evaluate how useful the financial data in Table 2 is to GK’s stakeholders.

Knowledge Understanding Application Analysis Evaluation

(1 mark) (1 mark) (2 marks) (2 marks) (3 marks)
Strong
3 marks

A justified contextual judgement about the

usefulness of the financial data to GK’s
2 marks stakeholders.

2 marks Two (business-facing) [EVAL]

pieces of analysis which [EVAL]
Two examples of show how two different [EVAL]
stakeholders stakeholders find financial
Good data useful.
1 mark 1 mark [APP] 2 marks
Knowledge of Understanding [APP] [AN]
financial data of financial data [AN] A justified non-contextual judgement about the
usefulness of financial data to a stakeholder.
[K] [U]
[EVAL]
[EVAL]

Limited 1 mark
1 mark
1 mark
One (business-facing)
One example of a piece of analysis which
A judgement of how useful financial data is.
stakeholder shows how a stakeholder
finds financial data useful.
[EVAL]
[APP]
[AN]

26
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