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Business Year 12 > Business Paper 2 > Flashcards

Business Paper 2 Flashcards

1
Q

what is a debtor

A

the person owes you money

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2
Q

what is creditor

A

the people you owe money to

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3
Q

what is a debt factoring company

A

selloing your debt back to a compay , you may loose some money

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4
Q

what is unlimited liabilities

A

means that the business owner ot owners are personally responsible for all of the debts of the business

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5
Q

what is a dead of partnership

A

a document all owners of the business sign

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6
Q

advantages of being a sole trader

A

you are your own boss
easy to set up
keep all profits

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7
Q

disadvantages of being a sole trader

A 
diificult to take holiday 
heavy work load 
may lack the skill required
may lack finance 
ulimited liablity
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8
Q

what is a limited company

A

company formed when a business is set up to have a sepreate legal identity from its owner

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9
Q

what is a private limited company

A

can raise funds from investors such as freinds and fmaily but not from the general publkic as shares are not listed

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10
Q

what is a public limited company

A

£50,000 share capital to come a plc
companies found on the stock exchange
legal requirement to produce an Annual account

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11
Q

what is a business plan

A

written document that describes a buisiness , its objectvives, stratergies the market it is in and its financial forecast

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12
Q

purpose of a business plan :

A

provides a focus or the buisness idea

helps focus the business for the purpose that it is set up for

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13
Q

what are all of the external factors:

PESTLE

A 
Political 
economic 
social 
technology
legal
enviromental
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14
Q

SWOT analysis

A

Stregnth
Weakness
Oppourtunity
Threats

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15
Q

what should be included in the business plan

A 
idea 
objectives 
finance required 
market overview 
cash flow forecast
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16
Q

why is cash important to a business

A

so they can pay their suppliers
pay your employees
re investing the money into the business

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17
Q

what is cash flow

A

the process of cash flowing in and out of the businesss

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18
Q

what is gross profit

A

before deductions

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19
Q

what is net profit

A

after deductions

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20
Q

examples of cash inflow

A 
cash sales 
sale of spare asset 
investment of share capital 
personal funds 
goverment grats
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21
Q

exaomples of cash outflows

A 
wages 
suppliers 
buying equipment 
loans
dividence
income tax
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22
Q

what is a cash flow forecast

A

a table showing predicted opening and closing balances including cash inflows , outflows , net cash flows all over a trading period

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23
Q

why do business need to forecast their sales

A 
bank loans 
predict profit 
to see if theyre break even
matgin of saftey 
business plan
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24
Q

what is extrapolartion

A

uses trends established from historical data to forecast the future

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25
Q

what is an independent variable

A

the factor that causes the dependent to change

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26
Q

what is the dependent variable

A

influcenced by independent

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27
Q

key factors affecting sales forecasts

A

consumer trends
economic variables
competitor

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28
Q

how can business look to increase their sales

A 
usp
increase productivity
lowering selling price 
minimising 
expanding over seas
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29
Q

what is pent up

A

demand that has been unreahed after a long period of closure

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30
Q

the importances of profit

A

return of taking a risk
measures the success of an investment
profit is an important source of finance

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31
Q

what are fixed costs

A

stays the same e.g. rent , salary, insurance

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32
Q

variable costs

A

can change e.g. wages, new materials

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33
Q

what are oppourtunity costs

A

the next best option

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34
Q

what are direct costs

A

expenesses that directly go into producing services

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35
Q

what are indirect costs

A

general business that keep you operating eg. rent utilities

36
Q

how do we work out semi variable costs

A

fixed costs + variable costs = SVC

37
Q

what is break even

A

when the businesses costs are equal to the businesses revenue

38
Q

how to workout break even point

A

fixed costs / contribution

39
Q

what is the margin of safety

A

the difference between the break even point and the current level of outpiut

40
Q

what is a budget

A

financial plan for the future concerning the reveneu and costs of a business

41
Q

what is a sales budget

A

expected sales over a given time period in terms of both sales quantity and sales value

42
Q

expidenture budget

A

expected costs over a period of time

43
Q

porofit / loss budget

A

the anticipated difference between sales and expedenture

44
Q

whatbis zero based budgeting

A

when costs cannot be justified then no money is allocated in the budget for those costs

45
Q

what is a profit margin

A

si the ratio of profit compared to sales reveneu . goves an indication of products profitability

46
Q

what is a statement of comprehensive income

A

calculates wether the firm has made a profit or loss by deduction all expresses from sales reveneu

47
Q

what is a statement of financial posiotion

A

calculate the networth of a business by balancing what the business owns against what it owes

48
Q

what is liquidity

A

a measure of a firms short term survival

49
Q

what is a acid test

A

a more sever test of a firms capabilities to meet its debts

current assets - closing inverntory

50
Q

how to work out debtor days

A

(trade debtors / revenue ) * 365

51
Q

how to workout creditor days

A

(trade payables / cost of sales ) * 365

52
Q

what is a stake holder

A

anyone taht is involved in a business

53
Q

what is a non current asset

A

made up of fixed costs and intangable assets

54
Q

what are fixed assets

A

long term function, used repeatedly by the business and cannot easily be turned into cash

55
Q

what are intangable assets

A

these assets have a value but are not physical

56
Q

how to work out total assets

A

total non current assets + total current assets

57
Q

what are liabilities

A

made up of current liabilities and non current liabilities

58
Q

what is total equity

A

total amount of money being utilised in the business

59
Q

what are diseconomies of scales

A

when you buy in bulk but the costs still get higher

60
Q

what is porduction

A

the process of changing inputs into goods and services

61
Q

what are the two main methods of production

A

job production

flow production

62
Q

what is job production

A

the method of production where one off specialised products are made for each customer

63
Q

what is flow production

A

products are made continuously from one stagr to another also called mass productio

64
Q

what is kaizen production

A

an approach to production that aims to acheive chnage from a series of small steps . all workers are encouraged to think continously about ways to improve the product

65
Q

what is cell production

A

workers are organised into multi skilled teams , each team is responsible for a particular part of the productip

66
Q

what is jit

A

Just In time

stock arrives on the production line just as it is needed this minimises the amount of stock has to be stored

67
Q

what is stock

A

represents the raw materials , work in progress and finished goods held by a firm to enable production and meet customer demand

68
Q

what is capacity

A

a measure of how output can acheive in a given time periods

69
Q

what is capacity utilisation

A

the proportion of a business capacity that is acctully being used over a specific period

70
Q

capacity utilisation =

A

( actual level of output / maximum possible level of output ) * 100

71
Q

utilisation rate =

A

( number of available hours / total number of available hours ) * 100

72
Q

what is the ideal capacity utilisation

A

90%

73
Q

what is quality

A

a product or service is of good quality if it meets the needs and expectations of the customers

74
Q

how to survive in a recession

A

minimising costs
stimulate demand
production
investment

75
Q

what are the 4 stages of decision making

A

prevention
detection
correction
improvesments

76
Q

what is quality assurance

A

ensuring qulaity is delivered and maintained atr each stage of the product production process

77
Q

what is quality control

A

focuses on identifying faulty goods

78
Q

what is inflation

A

sustained increase in the average price level of an economy

79
Q

how is inflation measured

A

measured by the annaul percentage change in the level of prices as measured bu the consumer price index

80
Q

what is CPI

A

consumer price index ia calculated by tracking the price movements of 650 items

81
Q

what is legislation

A

a set of rules and regualtions whith which a business must comply . a constraint on action or a threat

82
Q

what are the main threats

A 
consumer legislation
producers 
enviroment
enviroment
employers
83
Q

main consumer laws

A

consumer protection act

trade desription act the sale of goods act

84
Q

main types of competition

A

price
quality
location
product range

85
Q

why does competition need to be protected

A 
innovation
develope new products
providing choice
differentiation
good quality 
reasonable

Business Year 12 (2 decks)

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