1.3

Question 1

What are financial object for a business?

Answer 1

1. Survival
2. Profits
3. Sales
4. Market Share
5. Financial security

Question 2

What are non-financial object for a business?

Answer 2

1. Social Objectives
2. Personal Satisfaction
3. Challenge
4. Independence
5. Control

Question 3

Why do business objectives differ between business?

Answer 3

Size

Question 4

Define Private Sector-

Answer 4

Controlled by groups or individuals. e.g New Look

Question 5

Define Public Sector-

Answer 5

Controlles, managed and operated by the government e.g NHS

Question 6

Revenue=

Answer 6

Quality of units sold X selling price

Question 7

Cost-

Answer 7

Business have to pay to produce their good

Question 8

Price -

Answer 8

How much something is sold at

Question 9

Fixed cost-

Answer 9

Cost that don’t change depending on the output

Question 10

What are examples of fixed costs?

Answer 10

• Rent
• Computer
• Insurance
• delivery costs
• Salary

Question 11

Variable Costs-

Answer 11

Costs that do change with the amount of output

Question 12

What are examples of variable costs?

Answer 12

• Packaging

- Raw materials

Question 13

Define salary-

Answer 13

Calculated over a year (annually) perod and usually divided by 12 monthly periods

Question 14

Define wages-

Answer 14

Paid by the hours of work completed or contracted. Working hours set can change

Question 15

Define total costs-

Answer 15

The sum of all costs in the business, they are fixed and variable costs added together

Question 16

Equation for total costs=

Answer 16

Fixed costs + Variable costs

Question 17

Profit=

Answer 17

Total revenue - total costs

Question 18

What does it mean if a number is in brackets?

Answer 18

It’s negative

Question 19

Equation for % change?

Answer 19

new-old/old X 100

Question 20

Define break even?

Answer 20

When the business isn’t making a profit or a loss

Question 21

What is the equation for break even?

Answer 21

fixed costs/selling price- variable costs

Question 22

Equation for margin of safety=

Answer 22

Actual sales- break even point

Question 23

Define margin of safety

Answer 23

The amount of sales the business can loose before they make a financial loss

Question 24

Define supplier

Answer 24

A business that sells materials to another business

Question 25

Define invency

Answer 25

Don't have enough money to pay costs

Question 26

Deine cash

Answer 26

Money available

Question 27

Define cash flow

Answer 27

The relationship between the money flowing into a business and the money flowing out

Question 28

Define cash flow forecast

Answer 28

a prediction of how much cash is coming in and going out of a business over a period of time

Question 29

Define cash inflow

Answer 29

Any money that come into the business

Question 30

Define cash outflow

Answer 30

Any money that comes out of the business

Question 31

Define net cash flow

Answer 31

The difference between the money brought in and the money spent for that month

Question 32

What is the equation for net cash flow

Answer 32

Inflows- outflows

Question 33

What is the equation for closing balance

Answer 33

Net cash flow for the month+ opening balance

Question 34

Define source of finance

Answer 34

Where you can get money from

Question 35

Define inflammation

Answer 35

Fluctuation in the value of goods/services

Question 36

Define interest

Answer 36

The % reward for saving or the % cost of borrowing

Question 37

What is the equation for interest

Answer 37

(Total repayment - borrowed amount)/Borrowed amount X100

Question 38

Define internal finance

Answer 38

Relates to money that has come directly within the business. There is no cost to the business of using this money

Question 39

Define external finance

Answer 39

Always comes from outside the business. There may involve a cost to a business

Question 40

Define calatorol

Answer 40

Asset to secure the debt

Question 41

Define short term finance

Answer 41

Quickly to pay back. 0-5 years

Question 42

Define long term finance

Answer 42

Money either never be repaid back or repaid over a long period of time (3+ years), usually used for start-up costs and expansion

Question 43

What are the 13 sources of finance

Answer 43

1. Personal savings 2. Capital retained from profit 3. Bank loan??? 4. Bank over draft 5. Hire purchase 6. Leasing 7. Share capital 8. Venture capital 9. Trade credit 10. Selling asset 11. Crowdfunding 12. Mortgage 13. Government grant

Question 44

Define dividends

Answer 44

A return given to shareholder based on profits

Question 45

Define aims

Answer 45

The strategic goals of a business; for example to grow

Question 46

Define objectives

Answer 46

More specific step; for example to increase market share by 5% over the next year

Question 47

Why are business aims and objectives important

Answer 47

- It gives specific targets by which business performance can be measured - Settings objectives can be used to motivate workers to achieve - Setting objectives clarifies business direction and decision making

Question 48

What do all aims and objectives need to be

Answer 48

``` Specific Measurable Achievable Realistic Time-bound ```

Question 49

Why might business have different aims and objectives

Answer 49

- Size of the business - How old the business - Type of business - Level of competition

Question 50

What is the equation for variable costs

Answer 50

Quantity sold X variable costs per unit

Question 51

Closing balance =

Answer 51

Opening balance + net cash flow