Name the Calculation for Gross Profit ?
Margin = Gross Profit (SP-VC) / Revenue X 100
Margin = Gross Profit (SP-VC) / Revenue
What is the calculation for net profit?
TR - (TVC+TC) / Revenue X 100
TR - (VC+TC) / Revenue X 100
How do you increase a businesses profitability?
Switch Suppliers
Sell your Assets
Reduce Expenses
BE = Profit Margin
Alter your Pricing Strategy
Name 4 causes of a business' failure, when cash flow issues occur
Seasonal Demand
Problem Child Products
Sales Revenue is Overestimated
Credit Sales
Stock Is all in the businesses hands
Too Many Staff
Little Profit
What is the definition of a budget? Give two benefits.
A Financial Plan + Motivational and Monitors a businesses progress
A Cash Flow Plan + Realistic Overviews and Look at a businesses inflows and outflows of cash
A Financial Plan + Money motivates employees
Name two drawbacks of a budget?
Start Ups lack realism (Not realistic demands)
Situations are always tangible
Unable to gather all the information from this
Unclear / Inaccuracies are key to business failure
What is the calculation for labour productivity?
LP = Actual Output (Units Produced) / Number of Employees
LP = Output / Number of Units Produced
What is the calculation for labour turnover?
LT = Number of Employees Leaving / Total Number of Employees X 100
LT = Number of Employees / Total Number of Employees Leaving
What is delegation?
The processing of tasks down the hierarchy from a manager to the shop floor
The processing of tasks down the hierarchy
What is the span of control?
The number of employees that the manager is responsible for
The number of employees being supervised
The number of employees working under the manager
Name the two hierarchy structures? How does it effect staff?
Tall + Specialises in promotions and high in opportunities, but decision making is slow
Flat + Quick decision makings, but hardly any opportunities to climb the hierarchy
High + Promotions aren't common but you have a higher wage structure
Low + Better Communication between staff, better relationships and a higher productivity.
Name four ways of solving cash flow issues?
Sale of Assets
Sale and Leaseback
Take Less Cash Out of The Business
Bank Overdraft
Bank Loan
Share Capital
Sale and Buyback
Business Investors
Business Angels
What is Internal Recruitment?
This is when existing employees apply for a job in the company they are working for
This is when employees recommend one of their friends for the job
What is external recruitment?
This is when people are gathered from outside the company, and the bosses do not know the person
This is when people are brought in from another country for employment in the UK
Choose two motivational theorists from this list.
Taylor - Money Motivates employees to work harder and produce more products
Maslow - Hierarchy of Needs - People are more satisfied when they move up the scale of employment
Herzberg - Hygiene V. Motivators (Money, Needs, Etc)
Mayo - Working in teams motivates more than money
Name the calculation for capacity utilisation?
Actual Output Per Annum / Max Output Per Annum X 100
Actual Output Per Annum / Output Per Annum
Name 3 impacts of under utilisation?
Higher Unit Costs
Lower Profits
Negative Image
Loss Of Reputation
Raising Finance
Trading Falls
What is Total Quality Management?
A Japanese Concept introduced to minimise waste and focus on efficiency, increases sales, and creates a USP
A German Concept introduced to focus on efficiency and creates a USP
A Chinese Concept, that minimises waste and improves your reputation
What are the downfalls of TQM?
Costs
Training
Disruption of Production
Too many products
Could lead to inaccuracies
Too many Staff Issues
What is customer service?
Giving Customers the correct service or product of high quality and enhances your reputation
Giving customers the service they desire to fix or mend broken items or amend services.
