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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
what is an independent variable
the factor that causes the dependent to change
26
what is the dependent variable
influcenced by independent
27
key factors affecting sales forecasts
consumer trends economic variables competitor
28
how can business look to increase their sales
``` usp increase productivity lowering selling price minimising expanding over seas ```
29
what is pent up
demand that has been unreahed after a long period of closure
30
the importances of profit
return of taking a risk measures the success of an investment profit is an important source of finance
31
what are fixed costs
stays the same e.g. rent , salary, insurance
32
variable costs
can change e.g. wages, new materials
33
what are oppourtunity costs
the next best option
34
what are direct costs
expenesses that directly go into producing services
35
what are indirect costs
general business that keep you operating eg. rent utilities
36
how do we work out semi variable costs
fixed costs + variable costs = SVC
37
what is break even
when the businesses costs are equal to the businesses revenue
38
how to workout break even point
fixed costs / contribution
39
what is the margin of safety
the difference between the break even point and the current level of outpiut
40
what is a budget
financial plan for the future concerning the reveneu and costs of a business
41
what is a sales budget
expected sales over a given time period in terms of both sales quantity and sales value
42
expidenture budget
expected costs over a period of time
43
porofit / loss budget
the anticipated difference between sales and expedenture
44
whatbis zero based budgeting
when costs cannot be justified then no money is allocated in the budget for those costs
45
what is a profit margin
si the ratio of profit compared to sales reveneu . goves an indication of products profitability
46
what is a statement of comprehensive income
calculates wether the firm has made a profit or loss by deduction all expresses from sales reveneu
47
what is a statement of financial posiotion
calculate the networth of a business by balancing what the business owns against what it owes
48
what is liquidity
a measure of a firms short term survival
49
what is a acid test
a more sever test of a firms capabilities to meet its debts current assets - closing inverntory
50
how to work out debtor days
(trade debtors / revenue ) * 365
51
how to workout creditor days
(trade payables / cost of sales ) * 365
52
what is a stake holder
anyone taht is involved in a business
53
what is a non current asset
made up of fixed costs and intangable assets
54
what are fixed assets
long term function, used repeatedly by the business and cannot easily be turned into cash
55
what are intangable assets
these assets have a value but are not physical
56
how to work out total assets
total non current assets + total current assets
57
what are liabilities
made up of current liabilities and non current liabilities
58
what is total equity
total amount of money being utilised in the business
59
what are diseconomies of scales
when you buy in bulk but the costs still get higher
60
what is porduction
the process of changing inputs into goods and services
61
what are the two main methods of production
job production | flow production
62
what is job production
the method of production where one off specialised products are made for each customer
63
what is flow production
products are made continuously from one stagr to another also called mass productio
64
what is kaizen production
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
what is cell production
workers are organised into multi skilled teams , each team is responsible for a particular part of the productip
66
what is jit
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
what is stock
represents the raw materials , work in progress and finished goods held by a firm to enable production and meet customer demand
68
what is capacity
a measure of how output can acheive in a given time periods
69
what is capacity utilisation
the proportion of a business capacity that is acctully being used over a specific period
70
capacity utilisation =
( actual level of output / maximum possible level of output ) * 100
71
utilisation rate =
( number of available hours / total number of available hours ) * 100
72
what is the ideal capacity utilisation
90%
73
what is quality
a product or service is of good quality if it meets the needs and expectations of the customers
74
how to survive in a recession
minimising costs stimulate demand production investment
75
what are the 4 stages of decision making
prevention detection correction improvesments
76
what is quality assurance
ensuring qulaity is delivered and maintained atr each stage of the product production process
77
what is quality control
focuses on identifying faulty goods
78
what is inflation
sustained increase in the average price level of an economy
79
how is inflation measured
measured by the annaul percentage change in the level of prices as measured bu the consumer price index
80
what is CPI
consumer price index ia calculated by tracking the price movements of 650 items
81
what is legislation
a set of rules and regualtions whith which a business must comply . a constraint on action or a threat
82
what are the main threats
``` consumer legislation producers enviroment enviroment employers ```
83
main consumer laws
consumer protection act | trade desription act the sale of goods act
84
main types of competition
price quality location product range
85
why does competition need to be protected
``` innovation develope new products providing choice differentiation good quality reasonable ```

Business Year 12 (2 decks)

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