2024 Cambridge IGCSE Business Studies (0450) Practice Paper with Answers

Information that has already been collected and is available for use by others (also known as desk research).

Award 2 marks for a full definition. Award 1 mark for a partial definition. Full definition: The collection of data/information that already exists / has been gathered by other organisations / for other purposes [2]. Partial definition: Desk research / research that is not first-hand / information that is already available [1].

The finance used to pay for the day-to-day running costs of a business, calculated as current assets minus current liabilities.

Award 2 marks for a full definition. Award 1 mark for a partial definition. Full definition: The finance/capital used to pay for the day-to-day running costs of a business OR current assets minus current liabilities [2]. Partial definition: Cash used to run the business / current assets [1].

Training that takes place away from the immediate workstation / workplace, such as at a college or specialist training centre.

Award 2 marks for a full definition. Award 1 mark for a partial definition. Full definition: Training that occurs away from the regular workplace/station [2]. Partial definition: Training away from work / learning from an outside expert [1].

A business with operations or production facilities in more than one country, with its headquarters typically based in one country.

Award 2 marks for a full definition. Award 1 mark for a partial definition. Full definition: A business that has offices, factories, or other assets in more than one country [2]. Partial definition: A company that sells or operates in many countries [1].

First, calculate profit:
$$\text{Profit} = \text{Revenue} - \text{Cost of sales} - \text{Expenses}$$
$$\text{Profit} = \$800\,000 - \$500\,000 - \$180\,000 = \$120\,000$$

Next, calculate profit margin:
$$\text{Profit Margin} = \left( \frac{\text{Profit}}{\text{Revenue}} \right) \times 100$$
$$\text{Profit Margin} = \left( \frac{\$120\,000}{\$800\,000} \right) \times 100 = 15\%$$

Final Answer: 15%

Award 2 marks for the correct final answer (including %): 15% (or 15).

Award 1 mark for a correct method but an incorrect final answer.

Method marks can be awarded for:
* Correctly calculating Profit = $120 000 [1]
* Correct formula: (Profit / Revenue) * 100 [1]
* Incomplete calculation showing: (120 000 / 800 000) * 100 [1]

Internal recruitment offers several benefits to a business like V-Styling:
1. It is cheaper and quicker than external recruitment as there are no external advertising costs.
2. The candidate is already familiar with the salon's operations and culture, reducing the need for induction training.
3. It acts as a motivator for current employees who see opportunities for promotion.
4. The management already knows the strengths, weaknesses, and reliability of the applicant.

Award 1 mark for each relevant benefit identified (maximum of 2).

Points might include:
* Cheaper / lower cost (as no external advertising is required)
* Quicker recruitment process
* Motivation for existing staff / provides a clear career path
* Already knows the culture/working practices of the business
* No induction training required
* Strengths and weaknesses of the applicant are already known

Do not credit advantages of external recruitment.

First, calculate the contribution per unit:
$$\text{Contribution per unit} = \text{Selling price} - \text{Variable cost}$$
$$\text{Contribution per unit} = \$15 - \$7 = \$8$$

Next, calculate the break-even output:
$$\text{Break-even output} = \frac{\text{Fixed costs}}{\text{Contribution per unit}}$$
$$\text{Break-even output} = \frac{\$40\,000}{\$8} = 5\,000 \text{ tins}$$

Final Answer: 5000

Award 2 marks for correct answer: 5000 tins (or 5000 units or 5000).

Award 1 mark for correct method but incorrect answer.

Method marks can be awarded for:
* Correct formula: Fixed costs / (Price - Variable cost) [1]
* Correct formula: Fixed costs / Contribution [1]
* Calculation: 40 000 / 8 [1]

Extension strategies are methods used to prolong the life cycle of a product before it goes into permanent decline. Examples include:
1. Adding new features or updating the design to make the product more appealing.
2. Finding new markets, such as exporting the product to other countries or targeting a different age group.

Award 1 mark for each relevant extension strategy identified (maximum of 2).

Points might include:
* Rebranding / change the packaging / change the name
* Adding new features / launching new versions or styles
* Finding new uses for the product
* Target new markets / sell to different market segments / export
* Change the channel of distribution
* Implement a new advertising campaign / promotional offers

Award 1 mark for each relevant benefit (max 2).
Award 1 mark for each relevant reference to this business (max 2).

Points might include:
- Quicker/cheaper to recruit [k] because HJZ does not need to pay for external advertisements for the supervisor role [app]
- Candidate already knows how the business operates [k] so they will understand how the 40 skilled craftsmen work [app]
- Motivating for existing employees [k] who see a clear career pathway in custom wardrobe manufacturing [app]
- The abilities and reliability of the applicant are already known to the directors [k]

To earn full marks, candidates must identify two distinct benefits of internal recruitment (1 knowledge mark per benefit) and link each benefit directly to the HJZ luxury furniture context (1 application mark per benefit).

Application points could include reference to:
- 40 employees / skilled craftsmen / workshop
- Luxury / custom wardrobes / furniture
- Production Director
- Supervisor

Award 1 mark for each relevant method (max 2).
Award 1 mark for each relevant reference to this business (max 2).

Points might include:
- Arrange a bank overdraft [k] which provides flexible short-term funds to cover the overheads of the 8 shops [app]
- Negotiate longer credit terms / delay payments to suppliers [k] such as the manufacturers of the toys [app]
- Reduce credit terms offered to customers [k]
- Hold a promotional sale to clear old stock [k] of slow-moving toys [app]
- Delay purchases of non-essential capital equipment [k]

To earn full marks, candidates must outline two valid methods to improve short-term cash flow (1 knowledge mark per method) and apply each method to the VPL retail context (1 application mark per method).

Application points could include reference to:
- 8 shops / retail chain
- Toys / holiday shopping season
- Short-term cash deficit / next three months

Award 1 mark for each relevant function (max 2).
Award 1 mark for each relevant reference to this business (max 2).

Points might include:
- Protects and contains the product [k] ensuring the liquid organic smoothie does not leak [app]
- Promotes the product/brand [k] helping the new juice bar attract attention in a competitive market [app]
- Provides information to consumers [k] such as listing the organic ingredients or nutritional information [app]
- Easy to open, use, or carry [k]

To earn full marks, candidates must identify two distinct functions of packaging (1 knowledge mark per function) and link each directly to GLP's smoothie product or juice bar business (1 application mark per function).

Application points could include reference to:
- Smoothie / juice bar / drink
- Organic / premium
- Liquid / perishable
- New business launch

Award 1 mark for each relevant factor (max 2).
Award 1 mark for each relevant reference to this business (max 2).

Points might include:
- Availability of government grants or subsidies [k] which could offset the high capital cost of building an EV assembly plant [app]
- Access to skilled labor [k] to assemble complex automotive parts and batteries [app]
- Transport infrastructure quality [k] to import components and export completed vehicles [app]
- Trade barriers/tariffs [k]
- Cost of land and construction [k]

To earn full marks, candidates must identify two general location factors (1 knowledge mark per factor) and apply each to BKM's context as an electric car manufacturer (1 application mark per factor).

Application points could include reference to:
- Cars / electric vehicles (EVs) / assembly
- Multinational / different countries
- Factory / plant construction

Advantage: Customised products can be made to meet specific requirements [k] of GLP's clients wanting unique dining tables [app], allowing the business to charge a premium price to increase its profit margins [an].

Disadvantage: Production costs per unit are typically high [k] because each dining table requires individual design and attention [app], which may reduce GLP's competitiveness if competitors use batch production to lower average costs [an].

Award 1 mark for identification of each relevant advantage/disadvantage (max 2).
Award 1 mark for each relevant reference to this business (max 2).
Award 1 mark for each relevant explanation (max 2).

Points might include:
Advantages:
- High quality / unique design [k] of the wooden dining tables [app]
- High level of worker motivation [k] for the 25 skilled craftsmen [app] leading to fewer mistakes [an]
- Can meet specific customer requirements [k] increasing customer loyalty [an]
Disadvantages:
- High unit/average cost [k] which could mean high prices [an]
- Production takes a long time [k] so GLP may not meet urgent orders [an]
- Expensive tools/equipment may be needed [k] for bespoke furniture making [app]

Factor 1: Footfall and customer profile of the area [k]. Opening near shopping areas where parents with young children visit [app] increases the likelihood of impulse purchases and sales [an].

Factor 2: Cost of rent/premises [k]. A prime location for a toy shop [app] might have high overhead costs, which could increase the business break-even point and lower net profits [an].

Award 1 mark for identification of each relevant factor (max 2).
Award 1 mark for each relevant reference to this business (max 2).
Award 1 mark for each relevant explanation (max 2).

Points might include:
- Level of competition [k] from other toy stores nearby [app] which could reduce sales [an]
- Cost of rent / taxes [k] which increases fixed expenses [an]
- Footfall / number of potential customers [k] buying educational items [app] to drive sales revenue [an]
- Availability of nearby transport/parking [k] for parents [app] making the store more accessible [an]

Benefit: Increases employee loyalty and job satisfaction [k], which encourages gym instructors [app] to stay with the company longer, reducing expensive recruitment costs for the 8 gyms [an].

Limitation: Adds to the business’s operating costs [k] because providing benefits like free family membership [app] reduces potential revenue from paying customers, lowering V-Fit's overall profits [an].

Award 1 mark for identification of each relevant benefit/limitation (max 2).
Award 1 mark for each relevant reference to this business (max 2).
Award 1 mark for each relevant explanation (max 2).

Points might include:
Benefits:
- Help recruit/retain high-quality staff [k] like skilled gym instructors [app]
- Increased motivation/productivity [k] leading to better customer service in the 8 gyms [app] and more loyal members [an]
- Improve brand image [k] as a caring employer [an]
Limitations:
- Increased labor costs / expenses [k] which could reduce profit margins [an]
- Not all instructors may value the same benefits [k] such as gym membership [app], making the incentive ineffective for some [an]

Advantage: Points of sale displays attract the attention of shoppers [k] looking for household items in supermarkets [app], which can encourage impulse purchases of the eco-friendly cleaning liquids and increase short-term sales [an].

Disadvantage: Supermarkets may charge high fees for prime display spaces [k], which increases marketing expenses [an] and could reduce the funds EcoClean has available for its social objectives [app].

Award 1 mark for identification of each relevant advantage/disadvantage (max 2).
Award 1 mark for each relevant reference to this business (max 2).
Award 1 mark for each relevant explanation (max 2).

Points might include:
Advantages:
- Encourages impulse buying [k] when shoppers see the cleaning liquids [app]
- Increases product visibility [k] in crowded supermarket aisles [app] raising brand awareness [an]
- Direct promotion at the point of decision [k] converting interest into immediate sales [an]
Disadvantages:
- High cost of designing/installing displays [k] which can reduce the profitability of the eco-friendly products [app]
- Retailers/supermarkets may refuse to allocate space [k] for a small social enterprise [app]
- May easily be ignored [k] if there are too many competing brands in the supermarket [an]

Prioritizing the environment can lead to higher costs (e.g., purchasing sustainable raw materials, recycling waste, installing low-emission equipment), which lowers profit margins in the short run. However, it can significantly enhance the business's brand image, helping to attract eco-conscious customers, secure government subsidies, and avoid legal fines. On the other hand, prioritizing short-term profits ensures high liquidity, quicker returns for shareholders, and provides the capital necessary for immediate survival or expansion. However, a disregard for the environment can lead to severe reputational damage, consumer boycotts, and strict regulatory penalties in the long term.

Award up to 2 marks for identification of relevant points (Knowledge):
- Environment: eco-friendly materials increase costs; positive brand image can attract customers.
- Profits: higher short-term profits increase shareholder dividends; provides funds for survival.

Award up to 2 marks for relevant development of points (Analysis):
- Higher costs from sustainable sourcing reduce short-term profit margins and cash flow.
- A strong reputation for sustainability can build brand loyalty, allowing the firm to charge premium prices in the long run.
- Ignoring environmental concerns can lead to legal penalties or clean-up costs, which reduces future profitability.

Award up to 2 marks for a justified decision/evaluation:
- e.g., A business should prioritize short-term profits initially to ensure market survival, especially if it is a new startup. However, in the long term, environmental sustainability must be prioritized as customer expectations and regulatory pressures will make an unethical or polluting business unsustainable.

Financial incentives such as piece rates directly reward manufacturing workers for their output, encouraging speed and hard work, which can increase overall factory productivity. However, this focus on quantity may reduce product quality and increase waste. Non-financial motivators, such as job rotation or job enrichment, improve worker satisfaction and morale by making repetitive assembly work less monotonous. This can reduce staff turnover and absenteeism. However, these methods may take longer to implement and might not satisfy workers' basic needs if wages are already low.

Award up to 2 marks for identification of relevant points (Knowledge):
- Financial: piece rates increase output; bonuses reward performance.
- Non-financial: job enrichment reduces monotony; job rotation increases worker skills.

Award up to 2 marks for relevant development of points (Analysis):
- Linking pay to output via piece rates encourages workers to produce more units to maximize earnings, but may lead to higher defect rates.
- Job rotation keeps workers engaged, reducing labor turnover and the recruitment costs of replacing bored staff.

Award up to 2 marks for a justified decision/evaluation:
- e.g., Financial incentives are generally the most effective way to motivate assembly line workers where tasks are repetitive and easily measurable. However, they should be combined with non-financial motivators like quality circles to ensure that the drive for high output does not compromise the quality of the manufactured goods.

Selling shares is a form of equity finance. It is highly beneficial for a startup because share capital does not have to be repaid, and there are no mandatory interest charges, which reduces pressure on the business's early cash flows. However, selling shares dilutes the founders' ownership and means sharing future profits through dividends. A bank loan, on the other hand, allows the founders to retain full control and ownership of the business. However, loans require regular interest payments regardless of whether the business is making a profit, which can severely threaten the survival of a new business if its cash inflows are low.

Award up to 2 marks for identification of relevant points (Knowledge):
- Shares: no repayment required; dilutes ownership and control.
- Loans: interest must be paid regularly; founders retain full control.

Award up to 2 marks for relevant development of points (Analysis):
- Since shares do not require interest, cash flow is preserved to buy essential inventory and fund day-to-day operations in the critical first year.
- Regular interest payments on a bank loan increase the startup's fixed costs, increasing the break-even point and the risk of insolvency.

Award up to 2 marks for a justified decision/evaluation:
- e.g., Selling shares is usually better for high-risk startups with uncertain cash flows, as the lack of debt pressure increases the chance of survival. However, if the owners are highly concerned about losing control or if they have sufficient personal assets to secure a low-interest loan, then a bank loan might be preferred.

Online advertising is highly effective because it allows a retail business to target precise demographics based on search history and location, has a global reach, and is easily measurable via click-through rates. However, online ads can easily be ignored, blocked, or skipped by users. Traditional print media (such as local newspapers, flyers, or billboard posters) has a physical presence and can be very effective for targeting local communities or older demographics who are less active online. However, print media is expensive to produce, cannot be updated instantly, and its direct impact on sales is difficult to measure.

Award up to 2 marks for identification of relevant points (Knowledge):
- Online: can target specific demographics; wider/global reach.
- Print: physical presence; effective for local or older target markets.

Award up to 2 marks for relevant development of points (Analysis):
- Online targeting reduces wasted marketing budget by showing ads only to people likely to buy, increasing the return on marketing investment.
- Printed flyers in a local area increase footfall directly to a physical retail store as they raise immediate local awareness.

Award up to 2 marks for a justified decision/evaluation:
- e.g., Online advertising is not *always* more effective; it depends entirely on the target market of the retail business. For an e-commerce fashion retailer, online ads are far superior. However, for a local bakery targeting elderly residents in a small town, traditional print flyers will likely yield a much higher conversion rate.

Benefit 1: It is a highly cost-effective training method. ET will not need to pay for external specialist trainers or travel expenses to an off-site center. The new workers are trained by experienced colleagues directly in the workshop, which keeps the costs of developing staff low.

Benefit 2: The training is customized to the specific needs of ET's production lines. Employees will learn specifically how to operate the unique wood-cutting tools and assemble toy components correctly. This direct experience reduces the risk of making mistakes and wasting valuable raw timber materials.

Award 1 mark for each relevant benefit identified (max 2).
Award up to 3 marks for each explanation (one of which must be applied to this context) (max 6).

Points might include:
- Lower training costs (no travel or external trainer fees)
- Training is tailored specifically to ET's processes
- Employees remain productive during training
- Easier to supervise/assess progress directly

Application could include: workshop, toy components, wooden products, raw timber, assembly line, wood-cutting tools.

Advantage 1: It reduces management overhead costs. With a wider span of control, ET needs fewer middle managers and supervisors to oversee the workers. This reduces the company's total wage bill, helping ET maintain competitive prices for its toys.

Advantage 2: It encourages delegation and worker autonomy. Because supervisors have many subordinates, they cannot micromanage each employee's crafting process. This gives ET's skilled workshop employees more independence over their work, which can increase their job satisfaction and motivation.

Award 1 mark for each relevant advantage identified (max 2).
Award up to 3 marks for each explanation (one of which must be applied to this context) (max 6).

Points might include:
- Fewer levels of hierarchy / lower administration costs
- Promotes delegation / empowers workers
- Improves motivation / sense of trust
- Faster communication from the top to the bottom of the structure

Application could include: workshop, craftsmen, wooden trains, competitive prices, toy production.

Factor 1: Total cost of finance. A bank loan will incur interest charges which can significantly increase the total cost of the equipment over time. Leasing might have lower monthly outlays in the short run and doesn't require a large upfront deposit, helping ET manage its cash flow better.

Factor 2: Ownership of the equipment. If ET uses a bank loan, it will own the wood-cutting machinery once the loan is fully repaid, meaning the machinery becomes a non-current asset on ET's statement of financial position. In contrast, under a lease agreement, the leasing company retains ownership, and ET will not have an asset to sell in the future.

Award 1 mark for each relevant factor identified (max 2).
Award up to 3 marks for each explanation (one of which must be applied to this context) (max 6).

Points might include:
- Cost of finance / interest rates
- Ownership of the asset
- Impact on cash flow / monthly payment size
- Flexibility / ease of upgrading the machinery

Application could include: wood-cutting machinery, statement of financial position, non-current asset, cash flow, equipment.

Advantage 1: Reduced competition in the segment. By targeting a small, specific market like educational wooden puzzles, ET avoids direct competition with major global mass-market toy brands that produce cheap plastic alternatives. This allows ET to establish a strong brand presence and loyalty within this niche.

Advantage 2: Ability to charge premium prices. Customers looking for specialized educational features or high-quality materials are often willing to pay a higher price. ET can set high prices for its wooden puzzles to cover high craft production costs and earn higher profit margins.

Award 1 mark for each relevant advantage identified (max 2).
Award up to 3 marks for each explanation (one of which must be applied to this context) (max 6).

Points might include:
- Less competition than in mass markets
- Ability to target advertising directly to a specific audience
- Ability to charge premium / high prices
- Brand loyalty is easier to build

Application could include: educational wooden puzzles, plastic alternatives, craft production, high-quality materials, developmental benefits.

Option 1: Piece-rate payment system. Advantages: Directly links effort to reward, which can dramatically increase productivity as workers strive to produce more wooden toys to earn more money. Disadvantages: Since workers are paid per unit, they may rush, leading to a decline in quality. For GT, which has a reputation for high-quality wooden toys, this could damage their brand image and lead to higher waste of raw materials. Option 2: Job rotation. Advantages: Workers swap tasks (e.g., cutting wood, painting, quality control) which reduces boredom and monotony. This can increase job satisfaction and motivation. It also creates a multi-skilled workforce, making it easier to cover for absent employees. Disadvantages: Training costs will increase as workers must learn multiple roles. Productivity may initially fall during training periods. Recommendation: Job rotation is the better option for GT. While piece-rate would increase output, it poses a major threat to the quality of the wooden toys. High-quality handmade wooden toys require precision and care, which are undermined when workers are rushed. Job rotation preserves quality while successfully reducing boredom and increasing motivation.

Level 3 (9-12 marks): Detailed discussion of both options in context. Well-justified recommendation of which option to choose, including why the alternative was rejected. Level 2 (5-8 marks): Detailed discussion of at least one option, or balanced but less detailed discussion of both. Judgment with some justification. Level 1 (1-4 marks): Limited discussion of the options with little or no explanation, or simple list of pros and cons. Simple recommendation with weak justification. Application marks can be awarded for references to: wooden toys, hand-crafted, raw wood materials, safety standards, paint, toy factory, multi-skilled woodworkers.

Option 1: Country X. Advantages: Low factory rent reduces the fixed costs of the business, which lowers the break-even point and improves profitability if sales remain stable. Disadvantages: Being far from the seaport means high transport costs to export finished bikes. It also increases delivery lead times, meaning EB might react slowly to changes in customer demand, potentially losing market share. Option 2: Country Y. Advantages: Being close to key bicycle part suppliers lowers transport costs for raw materials. This proximity makes it easier to implement Just-In-Time (JIT) inventory control, reducing storage costs. Low transport costs for exporting from nearby ports will keep unit costs competitive. Disadvantages: High factory rent increases fixed costs significantly, raising the business's break-even output level and increasing financial risk. Recommendation: EB should choose Country Y. Bicycle assembly relies on a steady flow of various imported parts. Proximity to suppliers ensures reliable component delivery and lower transport costs, which will likely outweigh the higher fixed rent costs over the long run, keeping total unit costs lower and ensuring competitive pricing for EB's bicycles.

Level 3 (9-12 marks): Detailed discussion of both locations in context. Well-justified recommendation of which location to choose, explaining why the other country was rejected. Level 2 (5-8 marks): Detailed discussion of at least one location, or less detailed discussion of both. Judgment with some justification. Level 1 (1-4 marks): Limited discussion of the locations with little or no explanation. Simple recommendation. Application marks can be awarded for references to: bicycle parts, frame, wheels, assembly plant, JIT inventory, export markets, heavy shipping, transport of large bulk items.

Option 1: Strategy 1. Advantages: High prices create a premium brand image that reflects the organic quality. Eco-friendly glass packaging appeals to environmentally conscious consumers, justifying the high price. Disadvantages: Teenagers generally have low disposable income, so high prices may severely limit sales volume. Glass is heavy and easily breakable, which may not appeal to active teenagers. Option 2: Strategy 2. Advantages: Penetration pricing makes the drink highly affordable for teenagers, encouraging rapid trial and brand adoption. Social media promotion is highly effective and cost-efficient for reaching the youth demographic. Disadvantages: Plastic packaging contradicts the 'organic and healthy' image of the brand, potentially alienating eco-conscious buyers. Low initial prices might lead consumers to perceive the drink as low quality. Recommendation: FS should choose Strategy 2 but with a focus on recyclable plastic. Teenagers are highly price-sensitive, so a low launch price combined with direct social media promotion will drive high volume sales quickly. Price skimming would price the product out of the target market's reach, regardless of the eco-friendly glass packaging.

Level 3 (9-12 marks): Detailed discussion of both strategies in context. Well-justified recommendation of which strategy to choose, detailing why the alternative strategy is less suitable. Level 2 (5-8 marks): Detailed discussion of at least one strategy, or less detailed discussion of both. Judgment with some justification. Level 1 (1-4 marks): Limited discussion of the strategies. Simple recommendation with weak justification. Application marks can be awarded for references to: organic ingredients, fruit juice, healthy drinks, teenage consumers, environmental concerns, plastic waste, social media platforms (e.g., TikTok, Instagram), glass bottles.

Option 1: Bank loan. Advantages: AL will own the delivery vans immediately, which adds to the firm's non-current assets on the statement of financial position. Once the loan is repaid after 5 years, AL has no further payments and retains full asset value. Disadvantages: Interest must be paid on top of the principal amount, increasing total costs. It requires collateral, and regular fixed repayments could strain monthly cash flow if logistics demand fluctuates. Option 2: Leasing. Advantages: No large initial capital outflow is required, protecting AL's working capital. The leasing company is usually responsible for maintenance and repairs, reducing operational hassle. AL can easily upgrade to newer, more fuel-efficient vans at the end of the lease contract. Disadvantages: AL never owns the vans, meaning they do not appear as assets. Over the long term, total leasing payments may end up being more expensive than purchasing the vehicles with a loan. Recommendation: AL should choose leasing. For a logistics company, vehicle reliability is critical. Leasing ensures the fleet is well-maintained by the lessor and allows AL to upgrade vehicles frequently to avoid breakdowns, preserving high-quality customer service without tying up $500,000 in depreciating capital assets.

Level 3 (9-12 marks): Detailed discussion of both financing options in context. Well-justified recommendation of which source to choose, with a clear comparison of long-term costs and operational benefits. Level 2 (5-8 marks): Detailed discussion of at least one option, or basic discussion of both. Judgment with some justification. Level 1 (1-4 marks): Limited discussion of the financing methods. Simple recommendation. Application marks can be awarded for references to: delivery vans, logistics, fleet, fuel costs, maintenance, transport services, non-current assets, high depreciation of vehicles.