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BT is a public limited company, registered on the London Stock Exchange - Scottish Highers Business Management - Question 1 - 2018

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BT is a public limited company, registered on the London Stock Exchange. It was originally a public corporation regulated by the Government; however, the company was... show full transcript

Worked Solution & Example Answer:BT is a public limited company, registered on the London Stock Exchange - Scottish Highers Business Management - Question 1 - 2018

Step 1

BT’s financial performance ratios

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Answer

To analyze BT's financial performance, we need to consider the three key ratios indicated in Exhibit 1:

  1. Gross Profit Ratio: This ratio shows the percentage of sales revenue that exceeds the cost of goods sold (COGS). It reflects how efficiently BT is producing its services.

    • For 2016, the Gross Profit Ratio was 11%, which indicates improvements compared to previous years.
  2. Profit for the Year Ratio: This ratio indicates how much profit the company generates from its total revenue. For BT, this ratio has decreased to 9% in 2016, which suggests a potential decline in profitability.

  3. Current Ratio: This is a liquidity ratio that measures a company's ability to pay short-term obligations. BT's current ratio of 0.81 in 2016 shows that it is slightly less capable of covering its short-term liabilities compared to its previous years.

Step 2

BT’s product life cycle stages

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Answer

Exhibit 2 illustrates BT Retail's product life cycle, which includes:

  1. BT Broadband: The product is at a growth stage, increasing demands as more consumers transition to digital communications.

  2. BT Landline: This segment is in a decline phase as customers move towards mobile and internet services.

  3. BT TV/Sport, BT Mobile Plans: Both categories are at varying stages of growth, demonstrating increasing consumer engagement, while also introducing innovative services to attract new customers.

  4. BT Public Payphones: Reflects a decline phase with the pervasive availability of mobile phones.

Step 3

BT’s selection process stages

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Answer

According to Exhibit 3, BT's selection process consists of the following stages:

  1. Application form/CV: Candidates submit their applications.
  2. Telephone interview: Shortlisted candidates are then interviewed via phone.
  3. Attainment test: Candidates take tests to evaluate relevant skills.
  4. Panel interview: Successful candidates engage in an in-depth interview with a panel.
  5. Assessment centre: Final candidates participate in activities and assessments to determine fit.

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