Business Planning Flashcards
What is a business plan?
A formal statement of the business’s goals with reasons why they are thought to be attainable and the plan for reaching the goals
Can you tell us about your company’s current business plan
DfE not business plan in traditional sense but has priority outcomes from SR.
Spending Review settlement for SR21 secured funding to 2025
Skills - level up productivity and employment by improving skills pipeline
Schools - level up education standards across the country
Famililies - support families and protect young people
What is your company’s management structure / business model?
Classic bureacratic approach
Defined hierarchy
Clear governance
Consistent rules and regulations
Clear chains of command and decision making authority
‘
What are your company’s values?
‘Future DfE’
Put children and learners first
Empower yourself and others
Deliver joined-up results
Be data, evidence and expertise driven
What tools does your company use to manage its business?
How do you ensure that you contribute to the achievement of your company’s objectives / business plan?
Be data driven - complete project delivery information by the reporting cycles required and ensure the data is accurate
Supply the diversity data requested by HR
What is contained within an appointment document?
Clarification of scope
Agree fid bid
Firms terms of business
Any agreed amendments to the firms terms of business
Contact details
What is the relevance of a SWOT or PEST analysis to business planning?
Information from the analysis can be used to shape the business strategy, highlighting areas of concern or advantages for the business
Using examples, could you please explain your understanding of SWOT analysis?
This is a business tool used to gain a focused understanding, at a given point in time, of the strengths and weaknesses in an organisation and external opportunities and threats – hence SWOT. These factors can help shape the business strategy, highlighting areas of concern or advantage for the business.
Examples =
Strength - educational knowledge,
Weakness - digital
Opportunity - New 10 year funding investment commitment
Threat - Rising inflation costs
What types of businesses are you aware of?
Sole Trader
Partnership
Limited Company
Limited Partnership
Limited Liability Partnership
Franchise
Joint Venture
What is a Sole Trader
Single owner of the business
Individual keeps all business profits after tax
PERSONALLY RESPONSIBLE for any LOSSES the business makes
Personal assets are not protected
Liability is NOT limited
What is a Partnership
Operates like a sole trader but with multiple owners.
All partners personally share responsibility for business, share profits, and ALL PERSONALLY RESPONSIBLE for any LOSSES
Liability is NOT limited
What is a limited company
A private company whose owners are responsible for the debts but ONLY to the extend of the amount of capital invested
Company finances are SEPARATE to Personal finances
Profit is owned by company and then after corporation tax distributed to shareholders as dividends
Directors responsible for running the company and have legal responsibilities
In what ways can a company be limited?
Limited by shares
- shareholders responsibility limited to value of shares they own
Limited by guarentee
-directors/shareholders financially back the org up to a specific amount if things go wrong
What is a franchise
A business set up under the branding of an existing corporation
What is a joint venture
Two or more business pool their resource to achieve a specific task
Can take any legal structure
JV is entirely separate form the two existing businesses
What is your company’s strategy and vision
Purpose - help children and learners realise their potential
What are your company’s terms of business?
Sets out
- the way a company does business
- the company’s rights/obligations to the client/customer
- the customer/clients obligations to the company
Give examples of what you might find in the Terms of Business
What Financial Ratio’s are you aware of?
Liquidiity ratios
Leverage ratios
Efficiency Ratios
Profitability Ratios
Market Value Ratios
What’s the purpose of Financial Ratio analysis
Track company performance
Make comparative judgements concerning company performance
Who are the users of financial ratios?
Internal - Management team, employees, owners
External - Financial Analysts, Retail Investors, Creditors, Competitors, Tax authorities, Regulatory Authorities, Industry Observers
What are Liquidity Ratios?
Liquidity Ratio’s measure a company’s ability to repay both short and long-term obligations
Name 4 Liquidity Ratios and how to calculate them
Current Ratio - measure’s company’s ability to pay off short-term libiabilities with current assets
Current Ratio = Current Assets/Liabilities
Acid test Ratio - measures a company’s ability to pay off short-term liabilities with quick assets
Acid-test ratio = Current Assets - Inventories/Current Liabilities
Cash Ratio - measures a company’s ability to pay off short-term liabilities with cash/cash equivalent
Cash Ratio = Cash/Cash equivalent/Current Liabilities
Operating Cash Flow Ratio = measure of the no. of times a company can pash off current liabilities with cash generated in given period
Operating Cash Flow Ratio = Operating Cash Flow/Current Liabilities
What are Leverage Ratios?
Measures the amount of capital that comes from debt
Name and explain 3 leverage ratios
Debt Ratio - measures relative amount of company’s assets provided from debt
Debt ratio = Total liabilities/Total Assets
Debt to Equity Ratio - calculates total debts and financial liabilities against shareholders’ equity
Debt to Equity Ratio = Total liabilities/ Shareholder’s Equity
Interest Coverage Ratio - shows how easily a company can pay its interest expenses
Interest Coverage Ratio = Operating Income/Interest Expenses
What are Efficiency Ratios
Use to measure how well a company is utilising its assets and resources
Name and explain 4 Efficiency Ratios
Asset Turnover Ratio - measures a company’s ability to generate sales from assets
Asset Turnover Ratio = Net sales/ Average total Assets
Inventory Turnover Ratio - measures how many times a company’s inventory is sold and replaced over a given period
Inventory Turnover Ratio = Cost of Goods/Average Inventory
Receivable Turnover Ratio - measures how many times a company can turn receiveable goods into cash over a given period
Receivable Turnover Ratio = Net Credit Sales/Average Accounts Receivable
Days Sales in Inventory Ratio - measures average no. of days company holds on to inventory before selling to customers
Days Sales in Inventory Ratio = 356 days/Inventory turnover ratio
What is Profitability Ratio?
Measures a company’s ability to generate invome relative to revenue, balance sheets assets, operating costs, and equity.
Name and explain 3 Profitability Ratios
Gross Margin Ratio - compares gross profit to its net sales to show how much profit after paying its costs of goods sold.
Gross Margin Ratio = Gross profit/Net Sales
Operating Margin Ratio/ Return on sales Ratio - compares operating income to its net sales to determine efficiency
Operating Margin Ratio = OPerating Income/Net Sales
Return on Assets Ratio - measures how efficiently a company is using it’s assets to generate profit
Return on Assets Ratio = Net Income/Total Assets
