Flashcards in Unit 3 : Finance and Human Resources Deck (40)
Give three factors that lead to spending too much and three factors leading to not getting enough money back into the business
Paying too much for expenses
Not enough sales
Not selling enough stock
Sales haven't covered the money lost
Explain what debt factoring is and is it a way of improving cash flow ?
Debt factoring is where you pay of someone's debt for them as they can't at the minute and then they have to pay you back the money later.
Yes / it's a way on improving cash flow
State 5 ways a company can improve their cash flow ....
Finding cheaper raw materials
Finding cheaper utilities
Cutting overtime in workers as well as office rent by making them work at home
Sell anything unnecessary ,such as assets
Fit light sensors to save money in electricity
What's a way of improving cash flow that's related to ordering stock ?
Introduce Just In Time stock control which means you dot have to pay money to rent a storage space
Buying assets on what type of purchase could save cost and therefore improve cash flow?
Describe what the term product portfolio means ?
The range of products a business produces is known as its product portfolio
Why is it advantages that each product in the portfolio will be at different stages in the product life cycle ?
Allows the business to reduce risk and spread it over all products as if the business only has one product and in it fails then the business will also fail
What is the difference between product line portfolio and product diversification ?
Product line portfolio is creating a range of products based on the existing product,such as flavours and size.whereas product diversification is creating different products to add to your existing products
What are the two factors that cause bad cash flow ?
Spending too much or not getting enough in
Size and age of the organisation aswell as how long and what the finance is needed for are all facets to be considered when choosing ....
Source of finance
Two internal sources of finance are ....
Give and advantage and disadvantage of both
Sale of assets : quick and easy to set up
Decreases profits and interest can be expensive
Retained profits ( profits kept back from the previous year to generate profits in the future years ) No interest to pay back however shareholder are unhappy due to receiving small dividend.
There are three types of external sources of finance.... state them and explain the positives and negatives of two short term ones
Short term,medium and long
Bank overdraft(taking more money form account that is present) : easy to arrange and inexpensive although there is a risk of additional charges if not paid back within the time period
Grants: can be a long time before receiving one as takes a while to complete and send of forms.however the money doesn't need to be paid back
State an advantage and disadvantage of bank loans as a medium term source of finance ....
Business can budget and plan as money is paid back in fixed loans
Interest has to be paid and may be high for a new business
Hire purchase is where a ____ if paid for the item and the rest is paid in instalments.This makes it more _____ as the cost is ____.Business can receive the item immediately without _______ in ____.However the item is not fully owned by the company.Hire purchase it what type of length of finance
Paying in full
What is the best way to look at a firms profitability ?
Calculating profit ratios
How do you find the gross profit ?
Then how do you find the gross profit ratio
Sales (turnover) minus cost of sales
Gross profit divided by sales x 100 give the %
Gross profit - expenses is the formula for what
Definition of marketing is
Anticipation,identification,fulfilment of customer needs
State 5 types of marketing purposes ....
Raise awareness of the product or service on offer.
Conduct market research and promotion
Attract new customers and moniter their tastes and trends
Raise the profile of the organisation
Inform about products through adverts
What are liquidity ratios used to determine ?
How easily a business can pay off short term loans
Give the purpose of the working capital ratio and who it would be used by ?
The purpose is to determine whether a business has sufficient current assets to cover payment in full of current liabilities.
Lenders might use this information to see the reliability of their loan being paid back
What is the formula of acid test ratio ?
What is the purpose ?
To asses whether a business if suffering cash flow problems
Give three uses of ratio analysis ...
Compare the current years performance with that of last years
Use the information for forecasting or budgeting for the next finically year
To compare performance with those of similar organisations that are in the same industry and six
State three ways which the profit mark up ratio can be improved ?
Reducing the cost of production by finding a cheaper supplier ...
Increase the selling price to the consumer
Find cheaper utilities
Training needs to ..
IMPROVE SKILLS of workers so they can deal with changes in the business world due to technology changes .
BENEFIT the employee by developing skills and confidence as well as prepare employees for FUTURE PROMOTION
make sure workers can achieve the quality of working standards needed to keep the business competitive
What is on the job training and state and advantage and disadvantage ...
Training arranged within the firm either by the department manager of the HR department.Uaually carried out by an experienced worker who is an expert in the field.
This type of training ensures the product is still being made however may pick up bad habits from the trainer
Costs of training.....
Output and productivity are lost when staff are taking part in training.
The finically cost of training can be high especially specialist training.
Can be a waste of time and money if employees who took part in the training leave the business
Money is taken out of profits to cover the cost of training
Give examples of how ICT is used in training..
Staff in remote locations can be involved in training events using web conferencing which reduces the need for travel and is more Eco friendly.
Visual presentations provide reinforced verbal information from trainer or speaker.
Online tutorials can be set up between trainer and trainee so support is immediately available.
Technical issues may prevent meetings taking place if the network is down
Benefits of training ...
Staff become more flexible
have the ability to carry out a wider range of tasks
Wastage reduced which will improve the image of the company
Staff motivation increase which means less likely to take sick days
Staff become more efficient at carrying out their work
What do the terms recruitment and selection stand for ?
R- attracting a suitable number of people to apply for the job
S- choosing a suitable person to fill the vacancy
State the three points a business must produce to hire the correct person for a job...
Identify the job that has to be done ( job analysis )
Describe the job in detail ( job description )
Describe the skills and qualities of the person ( personal specification)
What are the main features of a job description ?
Tasks to be completed
Who the will be responsible to
Health and safety considerations
Location of where they'll work
Level of initiative needed
State the purpose of the job description and give features of it ...
Purpose is to allow applicants to decide if they want the job and is the basis for advertising the vacancy.
Job title and overall purpose
Resources needed to do the job
Working conditions and where the job is based
Skills and experience needed
Main tasks and responsibility
Why is a personal specification produced ?
To identify the individual and their particular skills or talents that you want to to the job - personal appearance,level of intelligence and type of personality desired.
State the advantages of internal recruitment
In an inexpensive method
It's a quicker method
Employees morale is boosted as gives the existing employees the opportunity to develop their career
Little induction is necessary and no training is needed as employee is already familiar with the business,saving costs
Employees strengths and weaknesses are a.ready known as well as how they conduct themselves professionally
What contributes to a successful interview ?
the interviewer(s) have prepared fully for the interview, with set questions, with full information on what is required;
it may be helpful to prepare a checklist in advance;
they also require training in interview techniques which will allow the interviewer to compare candidates more equally;
the interviewers are not persuaded by the appearance, personality and the interview techniques of the applicant;
they bring the best out of each candidate, by being open-minded and unbiased towards candidates, making them welcome and relaxed, control the interview, and ensure that all relevant information is gained and given.
State the three types of leaders and what they mean ....
Autocratic leaders - make decisons with out consulting staff
Democratic - make final decisions but include team members in the decision making process
Laissez - fairs leaders - give their team lots of freedom and provide support if nessecary
What is the definition of workforce planning ...
Deciding what type and how many or workers are required, regards to aspects of the staff requiements
What are the four groups of staffing that can be categorised by the HR department
NEWLY appointed staff
POTENTAIL future staff