3.5

Question 1

What is the Statement of Financial Income SOFI

Answer 1

Profit and loss account
Contains profit, overheads, cost of sales

Question 2

Statement of financial position

Answer 2

Assets and liabilities, equity

Question 3

Gearing ratio

Answer 3

Proportion of a firms equity that is borrowed
Non current liabilities/ (Total equity + non current liabilities) x100

Highly geared business is bad as it means most of its finance is from loans
Low geared business will be more likely to be offered loans

Question 4

Return on capital employed

Answer 4

Shows how effectively the business has generated profit based on the investment placed within it
Operating profit/ capital employed x100
Capital employed = total equity + non current liabilities

Question 5

Labour productivity calculation and explanation

Answer 5

Output per time period /Number of employees
Higher the better
Does not take into account technology

Question 6

Labour turnover and labour retention

Answer 6

No of staff leaving / av no of staff
High is bad employees not happy costly
Some industries w seasonal workers may not be too bad

Question 7

Absenteeism

Answer 7

No of staff absent / Total employees
High is bad

Question 8

HR strategies to increase productivity and to reduce labour turnover

Answer 8

Financial rewards- attendance bonuses , loyalty rewards
Consultation - delegation
Employee share ownership- low risk investment
Empowerment - extra training , flexible working hours ect.