(a) Evaluation of business risks
Generally up to 1½ marks for each business risk evaluated. In addition, 1 mark for relevant trends calculated and used as part of the risk evaluation.
– Regulatory risk – licensing of products
– Regulatory risk – patent infringement
– Regulatory risk – advertising
– Skilled workforce
– Risk of diversification
– Cash flow issues – negative trend/cash management issues
– Cash flow issues – reliance on further bank finance (allow up to 3 marks here if several points covered)
– Cash flow issues – timing of cash flows
– Court case – bad publicity and further scrutiny
– Risk of overtrading