Flashcards
Finance in BUSS2
Cards in this deck (8)
- 1What is ROCE and how do you work it out?ROCE measures the profit made from capital invested.
- 2Why does variance occur?Variance arises from the difference in the actual figures and budgeted figures.
- 3What are the causes of cash flow problems?Less profit or losses
Overtrading
Allowing customers to much credit
Too much stock - 4What is net profit margin and how do you calculate them?Surplus of profit after total costs have been deducted
- 5Are adverse variances all bad?No, as an adverse in production costs may mean a favourable in no. of sales
- 6What are the methods of improving cash flow?Overdraft
Loan
Sales and Leaseback
Debtor factoring - 7What are the methods of improving profitability?Increase quantity sold through marketing
Increase selling price is PED is inelastic
Increase output to spread FC over units
Lower VC cost as no change in price - 8Benefits and drawbacks of using a budget?Benefits: control income and expenditure. monitor performances & therefore improve efficiency.
Drawbacks: inflexibility in decision making. too unrealistic and be de-motivating. time consuming should focus on real issues
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- A levels Business Studies Flashcards on Finance in BUSS2, created by Annie Siti on 12/02/2015.
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- Annie Siti
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