Paper 2 Flashcards by Amy Craik

What is a monopoly?

Monopoly is a market structure where there is one firm who has control over the market for a product or service by being the sole supplier.

Think of Monopoly the aim of the games is to buy (take over) as much of the property on the board as possible and therefore end up as the sole supplier.

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CalMac directly benefited the economy by doing what? (2)

Generating £227.2 million in turnover with an aggregate footprint of £350.6 million

Support 1513 FTE jobs with a total of 2527 across the economy.

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What is regional/geographical unemployment?

Unemployment occurs in a particular region of the country that may be dependent on a particular industry rather than the whole economy.

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What is inflation?

The loss in purchasing power of money.

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What is the current UK inflation rate?

UK inflation falls to 3.4% as of February 2024.

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What is the UK target inflation rate?

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What is fiscal policy?

Fiscal policy is where the government influences aggregate demand and economic activity by changing taxation levels and government expenditure.

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What is a good liquidity ratio benchmark?

Current ratio should be 2:1 which means there are twice as many current assets as current liabilities so there should be no problems paying debts.

Acid test ratio should be 1:1 which excludes stock so there are enough liquid assets to pay debts.

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What two ratios do you use to calculate profitability?

Gross profit
Operating profit

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How to calculate gross profit ratio?

Gross profit/revenue x 100

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How to calculate operating profit ratio?

Operating profit before interest/revenue x 100

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What two ratios are used to calculate liquidity?

Current ratio
Acid test/quick ratio

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How to calculate current ratio?

Current assets/current liabilities

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How to calculate acid test/quick ratio?

Current assets-inventory/current liabilities

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What calculations do you do to calculate efficiency?

Trade receivables turnover
Trade payables turnover

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How to calculate trade receivables turnover?

Trade receivables (debtors) / credit sales (revenue) x 365

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How to calculate trade payables turnover?

Trade payables (creditors) / credit purchases (cost of sales) x 365

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Purpose of SWOT?

SWOT analysis helps the business:
Analyse current position/environment
Attempt to forecast the future

3 methods of motivating the workforce?

Financial reward e.g. bonuses
Mentorship programme help staff progress and build themselves up
Performance appraisal

How to make objectives SMART?

Specific, measurable, achievable, realistic and timely

Objectives should be set out in a way in which the achievement of them could be identified (measured)

What is the organisational structure of CalMac?

Functional organisational structure.
It is a vertical hierarchy.
It has a board of directors and then 8 departments below that with managers:
Product and engineering
Finance
HR
Legal
Marketing
Health
Operations
Sales

How are managers trained to monitor performance effectively at CalMac?

Management and leadership academy framework alongside online guidance notes, tool kits and coaching.

How many sit in CalMac board of directors and who is CEO?

7 on board of directors
Duncan Mackison is interim CEO for David MacBrayne Linited and executive director for CalMac ferries limited

State two ways in which performance appraisal can motivate the workforce.

Employees can help to set own objectives for period of work.

Employees can identify their own development needs.

What is democratic management?

Encourages each team member to participate in decision-making by sharing their opinions. A democratic leader encourages open conversation and helps their employees set goals, evaluate their own performance and motivates them to grow.

What marketing segmentation to CalMac use?

Geographical segmentation Demographic segmentation Psychographic segmentation Behavioural segmentation

What are the main stages in the marketing planning process?

Analysis Planning Implementation Monitoring

CalMac implemented what in spring 2023?

A new ticketing platform to provide customers with a great choice to purchase and manage their tickets.

Green house gas emissions have increased by what?

6% form 2021/2022 to 2023

What have CalMac done to combat green house gas emissions?

Employed a full time fuel efficiency manager.

What do you do in a marketing audit?

Analyse internal and external factors SWOT Objective setting Action plan Evaluation - monitoring and control

CalMac strengths?

UK’s largest ferry operator in terms of ships and destinations served Customer focused (Clyde and Hebrides ferry services) CHFS contract benefited communities, businesses, tourism, employees and tax payers

CalMac weaknesses?

Below their 75% target of staff that would recommend CalMac as a great place to work. Green house gas emissions

CalMac opportunities?

Working with university of highlands and islands to create partnership for local training and further prospects To decarbonise fleet and become more environmentally friendly

CalMac threats?

Climate change Russia/Ukraine war price increase and potential issue impacting continuity of supply

Who are CalMac’s competitors?

Western ferries

Possible objectives?

Increase reliability Improve personal relationships with customers and suppliers Improve quality Distribution

What is a private limited company?

Candidates’ answers may include: * Owners are only liable to the extent of their shareholding * The Articles of Association of a private limited company may provide for a right of pre-emption so that when a member wishes to sell or to transfer ownership of his shares he must first offer them to existing members * No minimum capital requirement for a LTD company * Only need one director * No upper age limit for directors in a LTD * Audited accounts must be produced by a LTD within 10 months of the end of the financial year

Explain what is meant by a voidable contract and two circumstances when a contact may be voidable.

A voidable contract was legally binding at one point but suffers from an underlying defect which means that either party can apply to courts to have contract annulled or reduced

Identify 3 things needs for the formation of a contract.

Agreement (consensus in idem) Offer and acceptance Not unlawful Two parties or more

Outline the difference between a void and a voidable contract.

A voidable contract was legally binding at one point but suffers from an underlying defect which means that either party can apply to courts to have contract annulled or reduced

What are pros and cons of a private limited company? (4)

Shareholders and company directors have limited liability. Can raise capital more easily by issuing shares to investors. Higher administrative burden annual accounts, confirmation statements and director information updates are required by Companies House. Directors have specific responsibilities and duties and must act in company’s best interests, complying with various legal requirements and avoiding conflicts of interest.

CalMac delivers people strategy in line with the Scottish government fair work principles recognising what 4 trade unions?

Nautilus international, RMT, Unite, TSSS