3.5

Question 1

Financial statement

Answer 1

Written records that convey the bus activities and the financial performance of a company

Question 2

profit and loss statement is

Answer 2

a financial document showing the company revenue/income over the year and their costs and expenditure

Question 3

why are P+L accounts useful for a bus

Answer 3

-legal requirement
-sums up the performance of a bus to its stakeholder
-investors/lenders need to see one before making deals
-it can help forecast future profits and help planning

Question 4

stakeholders interest in P&L account

Answer 4

shareholders- want to know the final profit figure that the dividends will be paid out

investors-want to know the profitability of the bus. Worth investing or risk?

Employees and managers-may wish too know the expense of the bus

Question 5

the balance sheet

Answer 5

-shows the worth of a bus
-shows assets and liabilities and how it is financed
-a snap shot
-shows sources of funds and uses of funds
-plc and ltd have to publish them

Question 6

Capital employed is

Answer 6

Available finance for a business internally and externally
measure of the value of assets minus current liabilities. It must equal net assets

Question 7

non current assets

Answer 7

-long term (fixed)
-intangible assets e.g. patents
-tangible assets e.g.property

Question 8

current assets

Answer 8

-short term
-inventory
-trade and other receivables
-cash

Question 9

non current liabilities

Answer 9

-long term
-borrowings
-retirement benefit obligations
-provision for liabilities (money set aside for the future)
-other non current liabilities (for repairs etc)§

Question 10

Current liabilities

Answer 10

-short term
-borrowings (short term loans)
-current tax liabilities (corporate tax)
-provision for liabilities (to pay borrowings, tax etc)

Question 11

uses of balance sheet

Answer 11

-evaluate performance of bus
-evaluate potential of a bus to an investor
-summary valuations of a bus

Question 12

limitations of balance sheet

Answer 12

-value of assets sated may not be the same as the amount they will sell for
-intangible may include goodwill which is hard to put a value on
-is static snapshot of one day in the bus and the next day may change

Question 13

stakeholder interest

Answer 13

-gov will use financial info to calc tax
-stakeholders may analyse accounts and decide whether their investment capital is being used efficiently
-director and senior managers use to assist medium to long term planning
-dreditors determine ability to pay bills
-potentially investors decide if its a gapped investment

Question 14

ratio analysis

Answer 14

a method of quantifying a components liquidity, operational efficiency, and profitability to evaluate it’s performance over time and relative to its peers

Question 15

current ratio calc

Answer 15

current assets / current liabilities

-this is how much liquid cash a business has

Question 16

acid test ratio calc

Answer 16

current assets - stock / current liabilities

-this is how much liquid cash a business has excluding their stock

Question 17

gearing ratio calc

Answer 17

no current liabilities / capital employed x100

-lower the better
-higher gearing = higher interest payment
-effects value of dividends or abilities to borrow more money
-non-current is long term

Question 18

ROCE calc
(return on capital investment)

Answer 18

operating profit / capital employed x100

-the higher the better
-the profit in relation to how much money has been put into the bus
-how hard the bus made the money invested work

Question 19

Human Resources

Answer 19

-HR is the division of a business that is charged with finding, screening, recruitment, training job applicants, and administering employee benefit programs

Question 20

objectives and employees

Answer 20

if a bus wishes to achieve their objectives it is important that the workers:

-know the objectives
-agree with these aims
-work towards these objectives

Question 21

what can happen to a bus if workers don’t know or don’t agree with objectives

Answer 21

no focus
progress slow
stragetic achievement suffers
projects don’t get delivered
operational performance declines
no coordinations
productivity decreases (by up to 25%)

Question 22

employee contributions

Answer 22

Training and skills-a better trained workforce is generally more motivated more flexible and therefore more productive

Empowerment- allowing workers to contribute ideas and allowing them to make some decisions will increase morale

Leadership- the style of leadership must be appropriate to the bus circumstances

Question 23

workforce morale

Answer 23

-Is a good indicator of how good employees contributions are likely to be
-there are a number of ways to measure morale:
surveys
appraisals
waste level
reject rates
consumer complaints
industrial relations record

Question 24

reasons for poor motivation

Answer 24

-employees feel the job or workplace is not what they expected
-mismatch between job and person
-too little coaching and feedback
-too few growth and advancement opportunities
-employee feel devalued and unrecognised
-employees feel stressed from overwork and have little work/life balance
-loss of trust and confidence in senior leaders

Question 25

ways of calculating poor workforce morale

Answer 25

labour productivity
labour turnover
absenteeism rate

Question 26

labour productivity

Answer 26

output per time period / average number of employees x100

-output per workers measure efficiency
-can be improved by kaizen, TQM, lean production

Question 27

Absenteeism rate

Answer 27

-measures the proportion of the total workforce who are absent over a particular time period

number of working days los to absence / total number of working days available x100

Question 28

understanding absenteeism rate

Answer 28

-can show if there Is low staff morale or job satisfaction
-caused by: poor management, stress from overload or under-load, lack of recognition, poor working conditions
-could coast the business in terms of lost orders and poor customer relations
-can be improved by: job rotation, incentive scheme, job enlargement

depends on job industry e.g. construction employee may have a lot of accidents

Question 29

labour turnover

Answer 29

number of employees leaving / av number of employees x100

-tracks how quickly staff in the workplace change
-high labour turnover indicates:
poor staff morale
-possible problems with recruitment problems

Question 30

understanding labour turnover

Answer 30

-measure of performance
-some department may naturally have a higher turnover
-should be measures against historical figures in. bus
-higher labour turnover may be due to: poor recruitment, weak induction, lack of challenges in job, low pay rates
-if rising year of year management should see this as a red flag

Question 31

how could a bus reduce absenteeism

Answer 31

-introducing mire flexible working practices
-ensuring that jobs are interesting and challenging
-improving working conditions and thus reducing dissatisfaction
-improving relations between employees and employer
-introducing attendance bonus as an incentive to attend regular