3.1.1

Question 1

Businesses

Answer 1

Exist to provide a good or service by turning inputs into outputs

Question 2

Mission

Answer 2

An aim a business hopes to achieve

Question 3

Objective

Answer 3

A measurable target which can help achieve the mission

Question 4

An object can achieve long or short term goals

Answer 4

Long

Question 5

Profit formula

Answer 5

Total revenue-total costs

Question 6

Profit formula

Answer 6

Total contributions-fixed costs

Question 7

Gross profit formula

Answer 7

Total revenue-variable costs

Question 8

Operationg profit formula

Answer 8

Total revenue-total costs

Question 9

Gross profit margin% formular

Answer 9

Gross profit ÷ revenue ×100

Question 10

Operating profit margin % formula

Answer 10

Net profit÷ total revenue ×100

Question 11

Return on capital employed formula

Answer 11

Net profit÷capital employed ×100

Question 12

Profit is?

Answer 12

The reward to owners if the business.

Question 13

What can one do with profit

Answer 13

It can be retained/ reinvested in the business or paid to the owners

Question 14

Revenue formula

Answer 14

Selling price × number of units sold

Question 15

Fix costs can also be known as

Answer 15

Over heads or indirect cost

Question 16

Fixed costs

Answer 16

Must be paid even if the business makes no sales

Question 17

Variable costs can also be known as

Answer 17

Direct costs

Question 18

Variable costs

Answer 18

Are directly in line with sales

Question 19

Total costs formula

Answer 19

Fixed costs + variable costs

Question 20

Why does a business exist

Answer 20

To supply good and services that customers want to buy

Question 21

Successful business must

Answer 21

Satisfy consumers needs and wants

Question 22

Raw materials are what kind of cost

Answer 22

Variable cost

Question 23

The process of turning raw materials into goods and services is called

Answer 23

The transformation process

Question 24

What does the transformation process do

Answer 24

Adds value to the finished product or service

Question 25

What is the chain of production

Answer 25

Inputs>>>processing>>>outputs

Question 26

What is the relationship between mission and objectives

Answer 26

A mission is an aim a business hopes to achieve usually expressed in a mission statement

Question 27

What is a mission statement

Answer 27

Short passage of text that tell stake holders the aims if the business and why it exists

Question 28

Order the following aims, corporate objectives, corporate strategy, mission statement

Answer 28

Corporate strategy>>corporate objectives >>>mission statement>>>aims

Question 29

What Is an objective

Answer 29

A qualifiable (measurable) statement of a businesses goals.

Question 30

Why do businesses set objectives

Answer 30

To have a goal to aim for and to use ro measure their succes towards achieving the goal

Question 31

Objective are idealy smart what does that mean

Answer 31

Specific, measurable, agreed, realistic, and Specific

Question 32

What are the 5 common business objectives

Answer 32

Profit. Growth. Survival. Cash flow.sicial and ethical objectives

Question 33

To increase profits by 10% I the next 3 yrs is an example of

Answer 33

Profit objective

Question 34

To open 150 stores in Europe over the next 5yrs is an example of

Answer 34

Growth objectives

Question 35

To ensure break even is achieved over the next year is an example of

Answer 35

Survival objective

Question 36

To achieve a net cash flow of £1m over the next year is qn example of

Answer 36

Cash flow objective

Question 37

To donate 10% of annual profits to charity is and example of

Answer 37

Social and ethical objectives

Question 38

Why do businesses set objects

Answer 38

Stakeholders who have an interest in the business can gain benefits

Question 39

What is the first benefit a stakeholder can gain from an objective

Answer 39

Managers can ensure everyone is working towards the same goal

Question 40

What is the second benefit a stakeholder can get from an objective

Answer 40

Objectives can be motivating for employees as they know what the firm wants them to achieve

Question 41

What's the third benefit a stakeholder can get from an objective

Answer 41

Objectives can be used to review success if the businesses plan and adapt and make changes if necessary

Question 42

Revenue is also known as

Answer 42

Turnover and sales

Question 43

What is revenue

Answer 43

The earnings or income generated by a firm as a result if its trading activities.

Question 44

Revenue formula

Answer 44

Selling price × number of units sold

Question 45

What are fixed costs

Answer 45

Costs that we not alter when the business alters its level of output

Question 46

Rent is an example of what kind of cost

Answer 46

Fixed

Question 47

Variable costs are

Answer 47

Costs that alter directly with level of output

Question 48

Raw materials are an example of what cost

Answer 48

Variable

Question 49

Total cost formula

Answer 49

Fixed cost + variable costs

Question 50

What is profit

Answer 50

surplus of total revenue ÷ total costs for a given trading period

Question 51

What is the formula for profit

Answer 51

Total revenue- Total cost

Question 52

What is the first way profit can be measured

Answer 52

Gross profit margin

Question 53

What does gross profit margin do

Answer 53

This measures the profit made as a proportion of sales revenue taking only variable costs into account

Question 54

Gross profit margin formula

Answer 54

Gross profit÷sale×100

Question 55

What is the second measurement of profit

Answer 55

Operating profit margin

Question 56

What is operating profit margin

Answer 56

This measures the profit made as a proportion of sales revenue taking total cost into account

Question 57

Operating profit margin formula

Answer 57

Operating profit÷sales×100

Question 58

What is the third way profit can be measured

Answer 58

Return on capital employed

Question 59

What is return on capital employed

Answer 59

This measures the proportion that net profit is of the capital employed (invested) in the business

Question 60

What is the return on capital employed formula

Answer 60

Net profit÷capital employed ×100

Question 61

What is the first reason profit is important to a business

Answer 61

It xan be taken as a measurement of success by the business and a reward to them for taking a risk by investing capital in the business

Question 62

What is the second reason profit is important to a business

Answer 62

Bandks and other lenders are unlikely to lend to a business that does not either forecast or actually make a profit

Question 63

What is the third reason that profit is important to a business

Answer 63

Profit can actually be used to help the business expand