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Business A Level > Theme 2 > Flashcards

Theme 2 Flashcards

1
Q

Owner capital

A

=equity

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2
Q

Venture capital

A
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3
Q

Source of finance

A

This is where the finance has come from

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4
Q

Method of finance

A

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

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5
Q

Limited liability

A
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6
Q

Unlimited liability

A

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

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7
Q

Sales volume

A

How many goods have been sold

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8
Q

Sales revenue

A

How much money has been made

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9
Q

Selling price

A

How much is the price for each item sold

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10
Q

Sv=sr/sp

A

Sales volume = sales revenue/selling price

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11
Q

Gross profit

A

Sales revenue - cost of sales =gp

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12
Q

Operating profit

A

Gross profit - expenses = op

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13
Q

Net profit

A

Operating profit - interest =np

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14
Q

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

A

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

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15
Q

Profit

A

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

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16
Q

Cash

A

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

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17
Q

Cash

A

Cash is liquidity at a business disposable

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18
Q

Liquidity

A

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

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19
Q

Economic influence

A

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

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20
Q

Inflation

A

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

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21
Q

Business failure

A

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

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22
Q

Internal causes of business failure

A

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

23
Q

4 Business areas of focus

A

Finance
Human Resources
Operations
Marketing

24
Q

Sic

A

Sales
Image
Costs

25
Q

Productivity

A

Output per unit of input per time period

26
Q

Methods of production

A

Job
Batch
Flow
Cell

27
Q

Job production

A

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

28
Q

Batch production

A

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

29
Q

Flow production

A

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

30
Q

Cell production

A

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

31
Q

Four ways to improve productivity

A

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

32
Q

Benefits and cons of more efficient employees

A

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

33
Q

Stock control

A

Raw material
Components
Work in progress
Finished goods

34
Q

Capacity utilisation formula calculation

A

Current output/maximum output x100

35
Q

Calicut under utilisation

A

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

36
Q

Implications of under utilisation

A

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

37
Q

Implactions of under utilisation (good)

A

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

38
Q

Impalictions of over utilisation

A

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

39
Q

Competitive advantage

A

A feature that gives one business and over its rivals

40
Q

Comptivness

A

The extent to which a firm can stand up to

41
Q

Stockholding cost

A

The overheads resulting from the stock levels held by firm

42
Q

Buffer stock

A

The desired minimum stock

43
Q

Quality assurance

A

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

44
Q

Quality control

A

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

45
Q

Total quality management

A

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

46
Q

Kaizen

A

Continuous improvement

47
Q

Impacts of quality

A
48
Q

Quality circle

A

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

49
Q

Purpose of sales forecasts

A

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

50
Q

Factors affecting sales forecasts

A

Consumer trends
Economic variables
actions of competition

51
Q

Disadvantages of scales forecasts

A

No guarantee
Dynamic markets
Short term thinking

52
Q

Break even

A

Is the point which total revenue equals total costs

53
Q

Contribution

A

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

54
Q

Purposes of budgets

A

Planning
Forcatsing
Communication
Motivation

Business A Level (4 decks)

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