2.4

Question 1

revenue

Answer 1

selling price x number of units sold

Question 2

total variable costs

Answer 2

variable cost per unit x number of units sold

Question 3

total costs

Answer 3

fixed costs + variable costs

Question 4

profit

Answer 4

revenue - total costs

Question 5

interest on loans (in %)

Answer 5

(total repayment - borrowed amount) / borrowed amount x 100

Question 6

break even (units)

Answer 6

fixed costs / (selling price - variable cost per unit)

Question 7

break even (revenue)

Answer 7

break even (units) x sales price

Question 8

margin of safety

Answer 8

actual or budgeted sales (or output) - break even sales

Question 9

net cash flow

Answer 9

total cash inflows (receipts) - cash outflows (total payments)

Question 10

opening balance

Answer 10

closing balance of the previous period

Question 11

closing balance

Answer 11

opening balance + net cash flow

Question 12

lead time

Answer 12

delivery date - date stock re-ordered

Question 13

gross profit

Answer 13

sales revenue - cost of sales

Question 14

gross profit margin (%)

Answer 14

(gross profit / revenue) x 100

Question 15

net profit

Answer 15

gross profit - other operating expenses and interest

Question 16

net profit margin (%)

Answer 16

( net profit / revenue ) x 100

Question 17

average rate of return (ARR) (%)

Answer 17

(average annual profit / cost of investment ) x 100

Question 18

average annual profit

Answer 18

total profit / number of years

Question 19

percentage change

Answer 19

(difference in figures / original figure ) x 100

Question 20

average

Answer 20

total of all individual values / number of values in the set

Question 21

Q: What is profit?

Answer 21

A: Profit is the reward for the risk entrepreneurs take in providing a product/service

Question 22

What are the two main types of profit?

Answer 22

A: Gross profit and net profit.

Question 23

Q: How is gross profit calculated?

Answer 23

A: Gross profit = Sales revenue - Cost of sales.

Question 24

Q: How is net profit calculated?

Answer 24

A: Net profit = Gross profit - (Operating expenses + Interest).

Question 25

Q: How do you calculate the Gross Profit Margin?

Answer 25

A: Gross Profit Margin = (Gross profit / Sales revenue) × 100%.

Question 26

Q: What does the Gross Profit Margin indicate?

Answer 26

A: It shows the proportion of revenue left over after paying for costs of sales.

Question 27

Q: How do you calculate the Net Profit Margin?

Answer 27

A: Net Profit Margin = (Net profit / Sales revenue) × 100%.

Question 28

Q: What does the Net Profit Margin indicate?

Answer 28

A: It shows the proportion of revenue left over after paying all expenses.

Question 29

Q: What is the Average Rate of Return (ARR)?

Answer 29

A: The ARR measures the profit from a proposed capital project

Question 30

Q: How is the ARR calculated?

Answer 30

A: ARR = (Average annual profit / Cost of investment) × 100%.

Question 31

Q: What does the ARR help determine?

Answer 31

A: It helps decide which project generates the most profit.

Question 32

What is Sales Revenue?

Answer 32

A: Sales revenue is the financial value of units sold.

Question 33

Q: How do you calculate Market Share?

Answer 33

A: Market Share = (Sales revenue of business / Total sales revenue in market) × 100%.

Question 34

Q: How do you calculate the percentage contribution of a product to overall sales revenue?

Answer 34

A: Percentage contribution = (Sales revenue of product X / Total sales revenue of all products) × 100%.

Question 35

What is quantitative data?

Answer 35

A: Quantitative data is statistical numeric data used for decision making

Question 36

Q: What are the two sources of quantitative data?

Answer 36

A: Primary data (collected firsthand) and secondary data (collected by others).

Question 37

Q: What are examples of quantitative data sources?

Answer 37

A: Graphs, charts, financial data, marketing data, tables, and infographics

Question 38

Q: What is a bar chart?

Answer 38

A: A bar chart visually compares data, like monthly umbrella sales.

Question 39

Q: What is a pie chart?

Answer 39

A: A pie chart shows proportions, such as the breakdown of umbrella sales by model.

Question 40

Q: What is a scatter graph used for?

Answer 40

A: A scatter graph identifies relationships between two variables, like temperature and barbecue sales.

Question 41

Q: What types of financial data do businesses use?

Answer 41

A: Sales revenue, profit, costs, tax, interest rates, asset valuations, and bank balances.

Question 42

Q: What is Companies House used for?

Answer 42

A: Companies House collects key financial data from companies each year.

Question 43

Q: How is marketing data collected?

Answer 43

A: Through surveys, focus groups, observation, customer feedback, footfall data, publications, and media.

Question 44

Q: How can marketing data help businesses?

Answer 44

A: It aids in sales forecasting, product development, and promotional planning.

Question 45

Q: What does market data include?

Answer 45

A: Demographics, market size, competitor market shares, growth rates, average prices, investment data, and commodity prices.

Question 46

Q: How can market data benefit businesses?

Answer 46

A: It helps identify opportunities, plan for threats, and make investment decisions.

Question 47

Q: What are some limitations of financial data?

Answer 47

A: It can be interpreted differently, becomes outdated quickly, and may ignore qualitative factors like social responsibility or ethics.