Theme 2

Question 1

Owner capital

Answer 1

=equity

Question 2

Venture capital

Question 3

Source of finance

Answer 3

This is where the finance has come from

Question 4

Method of finance

Answer 4

This is the use of finance - or what use it would be suitable -eg loan to buy a computer

Question 5

Limited liability

Question 6

Unlimited liability

Answer 6

Debts that the business owes means that the owner must pay even by give up their home etc

Question 7

Sales volume

Answer 7

How many goods have been sold

Question 8

Sales revenue

Answer 8

How much money has been made

Question 9

Selling price

Answer 9

How much is the price for each item sold

Question 10

Sv=sr/sp

Answer 10

Sales volume = sales revenue/selling price

Question 11

Gross profit

Answer 11

Sales revenue - cost of sales =gp

Question 12

Operating profit

Answer 12

Gross profit - expenses = op

Question 13

Net profit

Answer 13

Operating profit - interest =np

Question 14

Why do ltds need to share their stats at the end of their

Answer 14

The business need to be transparent because legally the business is not the owners business

Question 15

Profit

Answer 15

Profit is recorded straight away
A business can trade many years without profit
To improve a business profit either they need to reduce costs or increase revenue

Question 16

Cash

Answer 16

Cash will not be recorded until it is paid out or revived which could be in a different trade year
A profitable business may go bust of it runs out of cash to pay a supplier or wages of staff
If owners introduce cash via savings or a loan this will not affect the profit figure

Question 17

Cash

Answer 17

Cash is liquidity at a business disposable

Question 18

Liquidity

Answer 18

The ability of a business to turn its assists into cash to pay it current liabilities

Question 19

Economic influence

Answer 19

When a business is affected in any way by economic factors eg inflation

Question 20

Inflation

Answer 20

The inflation rate is the rise in the price of goods in the UK economy

Question 21

Business failure

Answer 21

When a business ceases to trade or when a business does not trade in a profitable way

Question 22

Internal causes of business failure

Answer 22

Poor efficiency
Poor marketing
Failure to innovate
Bad management of working capital

Question 23

4 Business areas of focus

Answer 23

Finance
Human Resources
Operations
Marketing

Question 24

Sic

Answer 24

Sales
Image
Costs

Question 25

Productivity

Answer 25

Output per unit of input per time period

Question 26

Methods of production

Answer 26

Job Batch Flow Cell

Question 27

Job production

Answer 27

When one singular product is made at a time (specific customer ) Process can be long and also more pricey

Question 28

Batch production

Answer 28

This is the production method used when a business wants to make more than one item at a time

Question 29

Flow production

Answer 29

Flow production uses production lines with continuous movements of items through the process ( for mass produced products )

Question 30

Cell production

Answer 30

a manufacturing system where the workforce is divided into self-contained teams designed to complete a particular manufacturing process or product.

Question 31

Four ways to improve productivity

Answer 31

Productivity bonus Productivity deal Staff training Investment in new machinery and equipment

Question 32

Benefits and cons of more efficient employees

Answer 32

Lead to competitive advantage as prices per item made are lower than competitors Quality may suffer

Question 33

Stock control

Answer 33

Raw material Components Work in progress Finished goods

Question 34

Capacity utilisation formula calculation

Answer 34

Current output/maximum output x100

Question 35

Calicut under utilisation

Answer 35

Where a company doesn’t use enough of what they own

Question 36

Implications of under utilisation

Answer 36

Sale of assists Partial shutdown Hiring part time instead of full time Can mean refundices Cl

Question 37

Implactions of under utilisation (good)

Answer 37

Have more time to train staff Able to accept a non standard order Have time to maintain

Question 38

Impalictions of over utilisation

Answer 38

Can damage reputation of the business Quality suffers as mistakes are made in production No time Martian machinery or train staff

Question 39

Competitive advantage

Answer 39

A feature that gives one business and over its rivals

Question 40

Comptivness

Answer 40

The extent to which a firm can stand up to

Question 41

Stockholding cost

Answer 41

The overheads resulting from the stock levels held by firm

Question 42

Buffer stock

Answer 42

The desired minimum stock

Question 43

Quality assurance

Answer 43

How a business can design the way the product of service is produced or delivered to minimise the chances that output will be sub started

Question 44

Quality control

Answer 44

Checking the product after it is made and detecting a faulty outputs and getting rid of them

Question 45

Total quality management

Answer 45

Approach change in business culture that puts quality at the heart of everything in the business

Question 46

Kaizen

Answer 46

Continuous improvement

Question 47

Impacts of quality

Question 48

Quality circle

Answer 48

A group of employees who meet on a regular basis to talk about quality problems

Question 49

Purpose of sales forecasts

Answer 49

Avoid cash flow problems Frees up management Production capacity Employ more workers Start promotional activity

Question 50

Factors affecting sales forecasts

Answer 50

Consumer trends Economic variables actions of competition

Question 51

Disadvantages of scales forecasts

Answer 51

No guarantee Dynamic markets Short term thinking

Question 52

Break even

Answer 52

Is the point which total revenue equals total costs

Question 53

Contribution

Answer 53

The amount that each unit produced contribut3s towards the fixed costs of the business

Question 54

Purposes of budgets

Answer 54

Planning Forcatsing Communication Motivation