Fichas
Edexcel Business a level theme 2 flashcards
Fichas del conjunto (85)
- 1INTERNAL FINANCE (2.1..1)INTERNAL FINANCE
(2.1.1) - 2What is Internal Finance (2.1.1)Money gained from within the business i.e.
Retained Profit - profits reinvested
Owners Capital - savings invested
Sales of Assets - machinery and other assets sold - 3What are the Pros and Cons of Internal Finance (2.1.1)Pros:
Money is available immediately
Not interest in involved
Cons:
Can be limited in terms of the amount as well as options present - 4EXTERNAL FINANCE (2.1.2)EXTERNAL FINANCE
(2.1.2) - 5What is External Finance and name 3 examples. (2.1,2)Money gained from outside the business i.e.
Bank loans - money on top of interest
Business angels - investors who want an equity
Crowd Funding - particularly used by charities. - 6What are the Pros and Cons of External Finance (2.1.2)Pros:
Assets can be kept for productivity
Bigger Economies of Scale
Cons:
Interest is normally added
Loss of ownership may occur - 7LIABILITY (2.1.3)LIABILITY
(2.1.3) - 8What is Limited Liability (2.1.3)Where the owners of the company can only lose the money they invest
- 9What is Unlimited Liability (2.1.3)Where the owners of the company are liable for all debts made, meaning personal assets including property can be taken
- 10PLANNING (2.1.4)PLANNING
(2.1.4) - 11What is a Business Plan (2.1.4)A plan for the development of a business, giving details such as:
Financial forecasts
Premises and Equipment
Personnel - 12What is a Cash Flow Forecast (2.1.4)The prediction of all expected receipts and experiences of a business over a future time period which shows the expected cash balance at the end of each month.
- 13What are Cash Inflows (2.1.4)The flow of money into a business such as sales.
- 14What are Cash Outflows (2.1.4)The flow of money out of a business such as rent and wages.
- 15What is Net Cash Flow (2.1.4)The difference between the cash flowing into the business against the cash flowing out in a given time period.
- 16What is Solvency (2.1.4)The degree to which a business is able to meet the debts when they fall due.
- 17SALES FORECASTING (2.2.1)SALES FORECASTING
(2.2.1) - 18What is Sales Forecasting (2.2.1)The process of estimating future sales.
- 19What are the Pros of Sales Forecasting (2.2.1)Gives a company an insight into what they will need to meet or go further beyond their sales forecasts i.e.
Staff - 20What are the Cons of Sales Forecasting (2.2.1)A forecast is only a prediction, many factors may affect the company to not meeting their forecasts
- 21What are the Factors affecting sales forecasts (2.2.1)Consumer Trends
External Shocks
Economic Growth
Inflation - 22SALES, REVENUE AND COSTS (2.2.2)SALES, REVENUE AND COSTS
(2.2.2) - 23What is the formula for Sales Volume (2.2.2)Sales Revenue divided by Selling Price
- 24What is the formula for Sales Revenue (2.2.2)Price X Quantity of Output
- 25What is a Fixed Cost (2.2.2)Costs that never change i.e.
Rent - 26What is a Variable Cost (2.2.2)A cost that rises with output
- 27What is a semi-variable costA cost that consists of both fixed and variable elements.
- 28What is the 'total cost'The entire cost of producing a given level of output
- 29BREAKEVEN (2.2.3)BREAKEVEN
(2.2.3) - 30What is BreakevenWhen a business generates just enough revenue to cover its total costs
- 31What is Breakeven outputThe output a business needs to produce so that its total revenue and total costs are the same
- 32What is the breakeven pointThe point at which a company is making no profit or loss
- 33What is the formula for BreakevenFixed costs divided by contribution
- 34What is the formula for contributionSelling price - variable cost
- 35What is the margin of safetyThe range of output between the breakeven level and the current level of output, over which a profit is made.
- 36BUDGETS (2.2.4)BUDGETS
(2.2.4) - 37What is a budgetA financial plan for the future concerning the revenues and costs of a business.
- 38Name 3 purposes of a budgetControl
Planning/ preparation
Communication - 39What is a zero-based budgetA system of budgeting where no money is allocated for costs or spending unless they can be justified by the fund holder.
- 40What is a varianceThe difference between actual financial outcomes and those budgeted
- 41What is variance analysisThe process of calculating variances and attempting to identify their causes.
- 42PROFIT (2.3.1)PROFIT
(2.3.1) - 43What are the three types of profitGross profit
Operating profit
Net Profit - 44What is gross profit and what is the formulaThe difference between revenue/turnover and cost of sales
Formula =
Revenue divided turnover - cost of sales - 45What is gross profit margin and what is the formulaGross profit expressed as a % of revenue/turnover
Formula =
Gross profit divided by revenue X 100 - 46What is operating profit and what is the formulaThe difference between gross profit and business overheads, such as selling.
Formula =
Gross profit - Operating expenses - 47What is the operating profit margin and what is the formulaOperating profit expressed as a % of revenue/ turnover
Formula =
Operating profit divided by revenue X 100 - 48What is net profit and what is the formulaThe difference between operating profit and interest and exceptional items
Formula =
Operating profit - Interest - 49What is net profit margin and what is the formulaNet profit after tax, expressed as a % of revenue/ turnover
Formula =
Net profit before tax divided by revenue X 100 - 50Name 2 ways in which a company can become more profitableRaising Prices
Lowering costs through cheaper raw materials - 51LIQUIDITY (2.3.2)LIQUIDITY
(2.3.2) - 52What is liquidityThe ease of which assets can be converted into cash
- 53What is Acid Test RatioCurrent Assets - stock divided by Current Liabilities
- 54What is current ratioCurrent Assets divided by current liabilities
- 55BUSINESS FAILURE (2.3.3)BUSINESS FAILURE
(2.3.3) - 56Name 3 internal causes of business failureOvertrading
Seasonal Factors
Poor Leadership - 57Name 3 external causes of business failureCompetition
Changing consumer tastes/ trends
Changes in market prices - 58PRODUCTION, PRODUCTIVITY AND EFFICIENCY (2.4.1)PRODUCTION, PRODUCTIVITY AND EFFICIENCY
(2.4.1) - 59What is batch productionA method that involves completing one operation at a time on all units before performing the next
- 60What is cell productionInvolves producing a family of products in a self - contained unit within a factory
- 61What is flow productionLarge scale production of a standard product, where each operation on a unit is performed continuously one after the other, usually on a production line
- 62What is job productionA method of production that involves employing all factors to complete one unit at a time
- 63What is lean productionAn approach to operations that focuses on the reduction of resource use
- 64Name 3 factors that affect productivityMotivation of employees
Education and Training
Specialisation - 65Name 3 factors that affect efficiencyNew technology
Outsourcing
Kaizen - 66What is KaizenA Japanese term for continuous improvement
- 67CAPACITY UTILISATION (2.4.2)CAPACITY UTILISATION
(2.4.2) - 68What is capacity utilisation and what is the formulaThe use that a business makes of its resources
Formula =
Current output divided by max. possible output X 100 - 69Name 2 ways in which capacity utilisation can be improvedIncrease Sales
Reduce Capacity - 70STOCK CONTROL (2.4.3)STOCK CONTROL
(2.4.3) - 71Name 3 factors that influence stock levelsDemand
Type of stock
External Shocks - 72What are buffer stocksStocks held as a precaution to cope with unforeseen demand
- 73Name 3 implications of poor stock controlOpportunity cost
Unsold stock
Storage costs - 74What is JIT stock control and name 1 pro and 1 conA stock control method where stock is ordered when it is needed.
Pro: Storage costs are low
Con: If demand booms then they cannot meet it - 75QUALITY MANAGEMENT (2.4.4)QUALITY MANAGEMENT
(2.4.4) - 76What is quality controlMaking sure that the quality of a product meets specified quality performance criteria.
- 77What is Quality AssuranceA method of working for businesses that takes into account customers' wants when standardising quality.
- 78What is Total Quality ManagementTQM is a managerial approach that focuses on quality and aims to improve the effectiveness, flexibility and competiveness of the business
- 79LEGISLATION (2.5.2)LEGISLATION
(2.5.2) - 80Name 3 ways how consumer legislation affects businessesIncreased Costs
Quality Control
Changes in business practice - 81Name 3 ways how employment legislation affects businessesIncreased labour costs
Loss of flexibility
Penalties - 82Name 3 ways how environmental legislation affects businessesMarketing
Finance
HR - 83THE COMPETITIVE ENVIRONMENT (2.5.3)THE COMPETITIVE ENVIRONMENT
(2.5.3) - 84Name 3 things that determine competitivenessNumber of businesses in a market
Barriers to Entry
Differentiation - 85Name 3 ways that competitiveness can affect businessesPrice
Profit
Innovation
Información
- Descripción
- A summary of the whole of theme 2 within 85 flashcards
- Creado por
- James Pavier
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