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Business > Buisness Mock November > Flashcards

Buisness Mock November Flashcards

1
Q

How to work out expected value of decision tree

A

Probability of outcome occurring multiplied by payoff

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2
Q

Net gain

A

Financial gain after initial costs of decision have been subtracted

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3
Q

Features of decision tree

A

Square represents decision point
Circle shows alternative outcomes
Decimals lines are probabilities
Values in pounds represent payoff

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4
Q

Advantages of decision tree

A

Nice visual representation and simple to follow

I can help decide decision made for managers

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5
Q

Disadvantages of decision tree

A

Data is only quantitive and ignore all qualitative data
Probabilities are very hard to predict accurately
In reality was a wider range of potential outcomes

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6
Q

Roles of stakeholders

A

Care about the companies overall performance

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7
Q

Importance of stakeholders

A

Provide revenue and labour for business operations

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8
Q

Market share

A

Percentage of sales in a market made by one thermal brand

Sales/total market size x100

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9
Q

Market size

A

Market size is the total number of sales in the market over a period of time if the market increases from one period of time to another then the market is growing

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10
Q

Market growth

A

Newmarket - old market size/old market size x100

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11
Q

Price elasticity of demand

A

Response in demand due to change in price

Percentage changing quantity demanded/percentage change in price

Always negative
If greater than one, the product is price elastic if less than one then inelastic

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12
Q

In elastic and elastic for price

A

Elastic if demand is greater than price change?

In elastic if changing demand is less than changing price

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13
Q

How does price elasticity help?

A

Helping manufactured the side whether to raise or lower the price of a product

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14
Q

Boston matrix/portfolio analysis

A

Compare market growth with market share each side when the matrix represents one product the size of each side represents the sales revenue of the product

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15
Q

question marks /problem child.

A

New products they have small market share and high market growth. They aren’t profitable yet so they’re quite heavy marketing and brand building.

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16
Q

Cash cows

A

High market share but low market growth they’re in maturity phase they’ve already been promoted and they’re producing high volume so cost low cash cow’s bringing plenty of money

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17
Q

Stars

A

High market Griffin high market share but in the profitable growth phase and have the most potential their future cash cows but competitors are allowed to take advantage of this Grove market so you need to spend a lot on promoting to keep market share up and increase capacity to keep up with demand

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18
Q

Dogs

A

Low market share and low market growth pretty much a lost cause or failed product business will harvest profit in short term if no longer make a profit it can be sold off

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19
Q

Advantages of Boston matrix

A

Showing where business products are positioned in the market

Marketing decisions will depend on products positions in the matrix

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20
Q

Disadvantage of Boston matrix

A

Contradict what will happen to a product a product profit may be different from what the matrix suggests

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21
Q

Labour productivity

A

Measures how much each employee producers

Output per period/number of employees

Higher of the labour productivity the better of the workforce is performing as labour productivity increases labour cost per unit full

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22
Q

Ways of increasing labour productivity

A

Improving worker motivation
Training to make a more productive
New technology can increase speed

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23
Q

Disadvantages of increasing labour productivity

A

Increasing efficiency may impact quality and more waste may be produced
If capacity is not increased trained workers may be made redundant which lowers morale
New technology and trading can be expensive and business is needed to the side it’s worth investing

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24
Q

Unit cost

A

Total cost/units output
Lower output would result in higher unit cost

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25
Q

Economies of scale

A

Scale of production increases the cost of producing each item decreases

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26
Q

Internal economies of scale increase efficiency within a firm how?

A

Technical – production methods for large volumes are more efficient
Managerial – employment managers with specialist skills to manage specific department they oversee plans and strategies and help Work be done more efficiently and quicker
Purchasing – economies of scale to do a discount big businesses can negotiate discount when buying suppliers and large quantities
Marketing – large output can spread the cost of marketing over more units so they can afford more effective forms of advertising

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27
Q

External economies of scale

A

Make a whole industry or area more efficient
When industries are connected in a small geographic area, having a large number of supplies to choose from economy of scale
Locating their lots of supplies firms can easily negotiate with arrange your supplies which can increase quality and reduce prices
Good skilled local labour supply makes industry more efficient

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28
Q

Capital intensive

A

Uses more machinery than relative workers

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29
Q

Advantages of capital intensive production

A

Cheaper a manual labour in long-term
Machinery is often precise than human workers

Can work 24/7?
Easier to manage than people

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30
Q

Disadvantages of capital intensive production

A

High set up costs
Only suited to one task which makes them inflexible
If she breaks down, it can lead long delays
Fear of being replaced by machine can cause workers motivation to decrease

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31
Q

Labour intensive

A

More workers and less machinery

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32
Q

Advantages of labour intensive production

A

People are flexible and can be retrained
Cheaper for small scale production
Also cheaper while low-cost labourers available such as China and India
Workers can solve any problems that arise during production and can suggest ways to improve quality

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33
Q

Disadvantages of labour intensive production

A

Harder to manage people in the machines
People can be unreliable they can get sick
People can’t work without breaks or holidays
Wage increases mean the cost of labour can increase overtime

34
Q

Financial objective definition

A

Financial goals that a business wants to achieve set by financial managers and will help the business to achieve its corporate objectives must be consistent with the functional objectives improve coordination between thieves act as focus for decision-making

35
Q

Examples of financial objectives

A

Revenue
Cost minimisation
Profit maximisation
Improve cash flow

36
Q

External factors influencing financial objectives

A

Economy
Competitors
shareholders
Availability finance
Environmental/ethical influences

37
Q

Internal factors influencing financial objectives

A

Overall objective of the business
Status of business
Of the areas of business

38
Q

Break even output

A

Level of sales the business needs to cover his cost
Costs = revenue

39
Q

Margin of safety

A

Amount between actual output and breakeven

40
Q

Disadvantages of breakeven analysis

A

It seems variable costs always rise steadily a business can get discount for buying in bulk sometimes

Only for one product but businesses sell lots of different product products
If data is wrong, then results will be wrong

Assume the business sales all the products without any wastage

Only tells you how many units you need to sell to break even not how many you actually gonna sell

41
Q

Advantages of breakeven analysis

A

Easy to do if you can plot figures on graph and as quick
Lets businesses full forecast variations and sales will affect costs revenue profit and how price and cost will affect how much they need to sell

Help persuade bank to give him a loan
Decide whether or not new products are launched or not

42
Q

Labour turnover

A

Measures proportion of staff who leave each year

Number of staff leaving/average number of staff employed X 100

Higher the figure the large of the proportion of workers leaving

43
Q

External causes of labour turnover

A

Changes in regional unemployment levels
Growth of other local firms using staff with similar skills

44
Q

Internal causes of high labour turnover

A

Poor motivation of staff
Low wages
Lack of opportunities for promotion
Less responsibility

45
Q

Benefits of high staff turnover

A

Constant stream of new ideas for a new staff
Finn can recruit staff I’ve already been trained by competitors
If sales full phone can reduce workforce through natural wasted rather than cost redundancy
Enthusiasm, new staff influences other workers

46
Q

Disadvantages of high staff turnover

A

Lack of loyal and experienced staff who know the business
Firm loser staff, it has trained often to direct competitors
Training costs money and productivity drops while new staff get trained
Recruitment costs are high

47
Q

What is delayering?

A

Removing parts of the hierarchy creates a flatter structure with wider span of control
Can help lower costs by reducing salaries
But may cost business money in short time as trading stuff need to be retrained in new roles

48
Q

Narrow span of control

A

Not responsible for many people

49
Q

Flexible working definition

A

Where can I was in patterns are adapt suit employees?
And attractive prospective highly skilled workers

50
Q

Examples of flexible working

A

Flexi time – employees work full-time, but the side went to Work
Compressed hours
Annual hours
Job sharing
Home working

51
Q

Advantages of flexible working

A

Improve motivation so productivity improves

Help employees with children
Suits families, disabled workers and those who live remote places

52
Q

Disadvantages of flexible working

A

Impractical for business that needed to solve the public during normal work hours

Homework workers can be easily distracted at home
Job Sharon Conley to conversion over responsibilities and unequal workload

53
Q

Ansoffs matrix

A

Tool for comparing the level risk involves with the different strategies it helps manager to decide on direction for strategic growth

54
Q

Advantage of ansoff matrix

A

Doesn’t just layout potential strategies for growth also force his managers to think about expected risks of moving in certain directions

55
Q

Disadvantage of ansoff matrix

A

It fails to show that market development and diversification strategies also tend to require significant change in day-to-day workings

56
Q

Existing market and existing product

Existing product and a new market

A

Market penetration

Market development or extension

57
Q

New product and existing market

New product a new market

A

Product development

Diversification

58
Q

Economies of scope

A

Arises when a business produces multiple products instead of specialising in one it’s cheaper for one business to produce many products then to produce only one product

Basically more varieties cheaper

Existing businesses can benefit from brand loyalty and allows businesses to charge low prices due to lower unit costs which gives a competitive advantage due to being more efficient

59
Q

Experience curve

A

A business grows and increase itself volume it will begin to produce more products. Workers will get more experience and more efficient and making products which will cause the cost per unit to decrease
Efficiency increases of total units produced increases so costs per unit decreases

60
Q

Synergy

A

The concept value performance of two companies would be greater than for some of the individual parts(stronger together)

Which can lead to increase revenues combined talent combined technology and cost reduction

61
Q

What four factors does SWOT analysis use?

A

Strength
Weaknesses
Opportunities
Threats

62
Q

Which factors are internal and external for SWOT

A

Strengths and weaknesses are internal

Opportunities and threats are external

63
Q

Benefits of SWOT

A

Useful tool in developing strategy for more on strategic planning considered the businesses, individual circumstances and has done in factual and objective way

It could help build businesses strengths and converting weaknesses into strengths and managing threats

Can be easily redone to take an account changing conditions so it can adapt strategy using this analysis

64
Q

SWOT analysis and competition

A

Let the business know where it has a competitive advantage over its rivals the business can change attractive to focus on these elements

65
Q

Current liabilities

A

That which need to be paid off within a year they include overdraft taxes payable and dividends
Total current liabilities are deducted from total fixed and current assets to give the value of assets employed

66
Q

Non-current liabilities

A

That’s that the business will pay off over several years such as loans and mortgages

67
Q

Non-current assets

A

I said that the business is likely to keep for more than a year such as property land and equipment

68
Q

What two figures on a balance sheet should balance

A

Total equity and net assets

69
Q

Current assets

A

Assets of the business is likely to exchange for cash within the accounting year before next balance sheet is made this includes receivables and inventories

70
Q

Net assets formula

A

Total fixed and current assets minus total current and non-current assets

71
Q

Working capital formula

A

Amount of cash the business has available to pay a day-to-day debts

Current assets minus current liabilities

72
Q

Liquidity

A

How easily it can be to turn us into cash
Can be improved by decreasing stock level speeding up collection of debts out to the business or slow down payments to credit

73
Q

Current ratio

A

Compares current asset to current liabilities

Current assets/current liability

Ideal to be 1.5 to 2

Value below 1.5 suggested liquidity problem and a struggle to meet its current liabilities

74
Q

Examples of efficiency ratios

A

Inventory turnover
Payable days
Receivables days

75
Q

Inventory turnover

A

Tell you how many times during the year the business sold all the stock

Cost of sales/cost of average stock held

Can be improved by holding less stock or increasing sales easier

76
Q

Payables days ratio

A

Payable/cost of sales X365

Number of days the phone takes to pay for goods advice on credit from supplies

You can use the ratio to maximise it cash flow

77
Q

Gearing

A

Shows where a business gets his capital from and how vulnerable business is to change as an interest rate

%= noncurrent liabilities/total equity plus noncurrent liabilities X 100

Gearing above 50% showed more than half the business as finance comes from long-term debt

78
Q

Capital employed

A

Total equity +non-current liabilities

79
Q

How does gearing show the vulnerability of the business to change an interest?

A

More the business is borrowing the holiday will be hit by rising interest rates

Guarantee risk assessment can be used so an investor can help this decide whether to buy shares in the company or not the more the firm borrows the more interest they will have to pay. This may affect dividend paid the shareholder but that shows that the owner can take risks which may attract investors

80
Q

Total equity

A

Same as assets and there’s a amount invested into the business

81
Q

Net asset

A

Total assets- total liabilities

82
Q

What is working capital ratio also known as?

A

Current ratio

Business (8 decks)

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