Business

Question 1

PED

Answer 1

measures the sensitivity of demand to a change in price
%change in quantity demanded/ %change in price

Question 2

YED

Answer 2

Measures the sensitivity of demand to a change in income
%change in quantity demanded/% change in income

Question 3

sales forecasting

Answer 3

predicting future sales revenue, based on e.g. historical sales data, analysis of market surveys and trends

Question 4

times-series analysis

Answer 4

Statistical methods to analyse and forecast sales. An example of time series analysis is the calculation of a 3 point moving average.

Question 5

The Delphi method

Answer 5

The Delphi method is a sales forecasting technique were multiple rounds of questionnaires are sent to a panel of experts (who do not know each others identity) who work towards a common opinion about future sales

Question 6

current liabilities

Answer 6

money owed by the business that will be paid within a year. For example, trade payable’s (suppliers) and overdraft.

Question 7

Non-current liabilities

Answer 7

Money owed which is repaid over more than a year. For example, a bank loan, a mortgage.

Question 8

current assets

Answer 8

Assets that are cash (bank account) or can be turned into cash within a year. For example, stock, trade receivables (money owed by customers who have bought on credit)

Question 9

Non-current assets

Answer 9

Assets expected to be retained in the business for more than a year/long term. They are used to produced the output of the business e.g. machinery, vehicles, computers

Question 10

Normal goods

Answer 10

as real incomes increase, the demand for normal goods will also increase positive income elasticity that is less than 1 (positive)

Question 11

Inferior goods

Answer 11

Demand decreases as incomes increase i.e. as people get better off they buy less of these products and vice versa because consumers switch to better alternatives and substitutes products become affordable

Question 12

luxury goods

Answer 12

Demand increases as incomes increase and vice versa. they have a positive income elasticity of more than positive 1

Question 13

Budget

Answer 13

A budget is a financial plan for the future. Budgets can be for incomes, expenditure and profit

Question 14

Budget variance

Answer 14

the difference between the actual outcome and the predicted outcome

Question 15

Variance analysis

Answer 15

Variance analysis is checking actual outcomes against the predicted outcomes

Question 16

Favourable analysis

Answer 16

When the actual figure will lead to more overall profit being made than was budgeted. This could either be that actual costs were lower than budgeted or actual revenue was higher than budgeted.

Question 17

Adverse analysis

Answer 17

When the actual figure will lead to less overall profit being made than was budgeted. This could either be that actual costs were higher than budgeted or actual revenue was lower than budgeted.

Question 18

Net assets

Answer 18

The value of a company’s assets once the value of its liabilities has been deducted.

non current assets+current assets - current liabilities - non current liabilities