Please write clearly in block capitals.
Centre number Candidate number
Surname
Forename(s)
Candidate signature
I declare this is my own work.
A-level
BUSINESS
Paper 2 Business 2
, 2
Do not write
outside the
Answer all questions in the spaces provided. box
0 1 Read the information below and then answer the questions that follow.
SCF
SCF is a UK-based manufacturer of components that are sold to UK and EU businesses
which use them to produce computers. It has strong relationships with its small number of
customers. However, recent vertical and horizontal mergers involving other firms in the
sector have reduced the number of buyers. As a result, there are fewer opportunities to
win new contracts. Furthermore, many of the biggest computer manufacturers only want
to deal with large suppliers. Some manufacturers will only purchase components made in
the European Union (EU).
SCF’s owners are increasingly concerned about falling sales and profit margins. They
recently appointed a new Chief Executive who set out a vision for ambitious growth. The
growth plans focus on supplying directly to EU manufacturers from a new factory in Spain.
This factory would replace the existing UK site, where efficiency has been falling.
Appendix A Extract from SCF’s cash flow forecast
October 2025 November 2025
(£m) (£m)
Total inflows 3.24 3.35
Total outflows 3.11 3.22
Note: The closing balance for 31 October is £4.30 million.
Appendix B Financial information for SCF, 2022–2024
Year 2022 2023 2024
Inventory turnover (times) 5.9 5.6 5.2
Operating profit (£m) 0.92 0.71 0.63
Non-current assets (£m) 7.3 7.5 8.2
Non-current liabilities (£m) 3.1 2.9 2.8
Capital employed (£m) 9.3 10.0 10.2
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IB/G/Jun25/7132/2
, 3
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Appendix C Value of total market and SCF’s sales in different markets, 2020–2028 box
Note: Values for 2026 onwards are forecasts. These do not take into account the plan to
move production to Spain.
Appendices continue on the next page
Turn over ►
*03*
IB/G/Jun25/7132/2
, 4
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outside the
Appendix D Decision tree showing outcomes of different strategic options predicted by box
SCF’s sales forecasting
Option 1: Upgrade existing UK factory
Option 2: Build new factory in Spain
Appendix E Forecasts for selected economic variables, 2025–2028
2025 2026 2027 2028
UK GDP growth (%) +0.2 +1.2 +0.6 +1.3
EU GDP growth (%) +3.1 +3.6 +4.2 +5.1
UK unemployment (%) 5.5 6.2 7.1 7.0
UK interest rates (%) 5.4 5.2 5.5 6.1
Value of the £ in euros €1.18 €1.10 €1.03 €1.00
*04*
IB/G/Jun25/7132/2
Centre number Candidate number
Surname
Forename(s)
Candidate signature
I declare this is my own work.
A-level
BUSINESS
Paper 2 Business 2
, 2
Do not write
outside the
Answer all questions in the spaces provided. box
0 1 Read the information below and then answer the questions that follow.
SCF
SCF is a UK-based manufacturer of components that are sold to UK and EU businesses
which use them to produce computers. It has strong relationships with its small number of
customers. However, recent vertical and horizontal mergers involving other firms in the
sector have reduced the number of buyers. As a result, there are fewer opportunities to
win new contracts. Furthermore, many of the biggest computer manufacturers only want
to deal with large suppliers. Some manufacturers will only purchase components made in
the European Union (EU).
SCF’s owners are increasingly concerned about falling sales and profit margins. They
recently appointed a new Chief Executive who set out a vision for ambitious growth. The
growth plans focus on supplying directly to EU manufacturers from a new factory in Spain.
This factory would replace the existing UK site, where efficiency has been falling.
Appendix A Extract from SCF’s cash flow forecast
October 2025 November 2025
(£m) (£m)
Total inflows 3.24 3.35
Total outflows 3.11 3.22
Note: The closing balance for 31 October is £4.30 million.
Appendix B Financial information for SCF, 2022–2024
Year 2022 2023 2024
Inventory turnover (times) 5.9 5.6 5.2
Operating profit (£m) 0.92 0.71 0.63
Non-current assets (£m) 7.3 7.5 8.2
Non-current liabilities (£m) 3.1 2.9 2.8
Capital employed (£m) 9.3 10.0 10.2
*02*
IB/G/Jun25/7132/2
, 3
Do not write
outside the
Appendix C Value of total market and SCF’s sales in different markets, 2020–2028 box
Note: Values for 2026 onwards are forecasts. These do not take into account the plan to
move production to Spain.
Appendices continue on the next page
Turn over ►
*03*
IB/G/Jun25/7132/2
, 4
Do not write
outside the
Appendix D Decision tree showing outcomes of different strategic options predicted by box
SCF’s sales forecasting
Option 1: Upgrade existing UK factory
Option 2: Build new factory in Spain
Appendix E Forecasts for selected economic variables, 2025–2028
2025 2026 2027 2028
UK GDP growth (%) +0.2 +1.2 +0.6 +1.3
EU GDP growth (%) +3.1 +3.6 +4.2 +5.1
UK unemployment (%) 5.5 6.2 7.1 7.0
UK interest rates (%) 5.4 5.2 5.5 6.1
Value of the £ in euros €1.18 €1.10 €1.03 €1.00
*04*
IB/G/Jun25/7132/2
