Business Planning

Question 1

What is a business plan?

Answer 1

A formal statement of the business’s goals with reasons why they are thought to be attainable and the plan for reaching the goals

Question 2

Can you tell us about your company’s current business plan

Answer 2

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

Question 3

What is your company’s management structure / business model?

Answer 3

Classic bureacratic approach
Defined hierarchy
Clear governance
Consistent rules and regulations
Clear chains of command and decision making authority
‘

Question 4

What are your company’s values?

Answer 4

‘Future DfE’
Put children and learners first
Empower yourself and others
Deliver joined-up results
Be data, evidence and expertise driven

Question 5

What tools does your company use to manage its business?

Question 6

How do you ensure that you contribute to the achievement of your company’s objectives / business plan?

Answer 6

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

Question 7

What is contained within an appointment document?

Answer 7

Clarification of scope
Agree fid bid
Firms terms of business
Any agreed amendments to the firms terms of business
Contact details

Question 8

What is the relevance of a SWOT or PEST analysis to business planning?

Answer 8

Information from the analysis can be used to shape the business strategy, highlighting areas of concern or advantages for the business

Question 9

Using examples, could you please explain your understanding of SWOT analysis?

Answer 9

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

Question 10

What types of businesses are you aware of?

Answer 10

Sole Trader
Partnership
Limited Company
Limited Partnership
Limited Liability Partnership
Franchise
Joint Venture

Question 11

What is a Sole Trader

Answer 11

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

Question 12

What is a Partnership

Answer 12

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

Question 13

What is a limited company

Answer 13

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

Question 14

In what ways can a company be limited?

Answer 14

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

Question 15

What is a franchise

Answer 15

A business set up under the branding of an existing corporation

Question 16

What is a joint venture

Answer 16

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

Question 17

What is your company’s strategy and vision

Answer 17

Purpose - help children and learners realise their potential

Question 18

What are your company’s terms of business?

Answer 18

Sets out
- the way a company does business
- the company’s rights/obligations to the client/customer
- the customer/clients obligations to the company

Question 19

Give examples of what you might find in the Terms of Business

Question 20

What Financial Ratio’s are you aware of?

Answer 20

Liquidiity ratios
Leverage ratios
Efficiency Ratios
Profitability Ratios
Market Value Ratios

Question 21

What’s the purpose of Financial Ratio analysis

Answer 21

Track company performance

Make comparative judgements concerning company performance

Question 22

Who are the users of financial ratios?

Answer 22

Internal - Management team, employees, owners

External - Financial Analysts, Retail Investors, Creditors, Competitors, Tax authorities, Regulatory Authorities, Industry Observers

Question 23

What are Liquidity Ratios?

Answer 23

Liquidity Ratio’s measure a company’s ability to repay both short and long-term obligations

Question 24

Name 4 Liquidity Ratios and how to calculate them

Answer 24

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

Question 25

What are Leverage Ratios?

Answer 25

Measures the amount of capital that comes from debt

Question 26

Name and explain 3 leverage ratios

Answer 26

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

Question 27

What are Efficiency Ratios

Answer 27

Use to measure how well a company is utilising its assets and resources

Question 28

Name and explain 4 Efficiency Ratios

Answer 28

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

Question 29

What is Profitability Ratio?

Answer 29

Measures a company’s ability to generate invome relative to revenue, balance sheets assets, operating costs, and equity.

Question 30

Name and explain 3 Profitability Ratios

Answer 30

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