Bowton Spice Bazaar Flashcards
(24 cards)
What as some advantages of keeping stock?
Stock is available when required
Running out of stock could cause interruptions so keeping stock avoids this
What are the 4 methods of production?
Job production
Batch production
Process production
Flow production
What are some disadvantages or keeping stock?
It costs to hold stock
Some stock could be perishable and cannot be kept for long
What is just-in-time stock control?
No stock is held and raw materials are only ordered when needed
What is a skilled worker?
A skilled worker is someone that can do specialised jobs and needs no specialist training, they may also need to be paid more and may not be available locally
What is a unskilled worker?
An unskilled worker cannot take on more skilled tasks and will be paid less then a skilled worker
What is break-even?
Break-even is the point at which the business makes no profit and no loss
It is the point at which revenue=costs
What is the formula for break-even?
Break-even output=total fixed costs/selling price-variable costs
What are the uses of break-even?
Planning business start-up
To support borrowing requirements
To make decisions about cost and revenue
What are the limitations of break-even?
The figures are forecasts
The figures only relate to one product
Assumes all output is sold
What is the margin of safety?
The margin of safety is the amount of sales above break-even point or the amount by which sales could decrease before the product becomes unprofitable
Why does a business need finance?
Start up Growth Buy new equipment Move to a new premises Cash flow Research
What are the 2 sources of finance?
Internal to business
External to business
What are some internal sources of finance?
Cash in a bank
Retained profit
Owners investigating in the business
Sales of assets
What are some external finance sources?
Overdraft Trade credit Bank loan Lease Hire purchase Grants Mortgage New partners
What is a cash flow forecast?
Cash flow forecasting or cash flow management is a key aspect of financial management or a business, planning it’s future cash requirements to avoid a crisis of liquidity
Why do business forecast cash flow?
Businesses need to plan
Part of the planning will involve spending money
They need to know what cash will be available and when
They need to know if they will have to source extra finance
What are some reasons businesses are concerned about society and the environment?
Ethnical reasons
Reputation
Legal requirements
Efficiency
Ways a business can become more green
Switch off lights and equipment Reduce, reuse, recycle Buy recyclable materials Use fuel-efficient vehicles But locally Reduce water use Insulate buildings Use solar and wind power
Ways to be ethical
Trade fairly
Buy from ethical suppliers
Work with local communities
What are the impacts or recession?
People buy less luxury goods
Companies with debt find it hard to keep up with loan payments
What is globalisation?
Globalisation is where businesses in different countries become interconnected
What are the benefits of globalisation?
Larger markets for businesses to buy from and sell to may lead to economies of scale
More employment opportunities for workers
What are exchange rates?
When trading with different countries, businesses are affected by exchange rates.
