L4M4 Revision Session Flashcards
What does outsourcing mean?
This is when a non-core function which is procured externally. This is something that has previously been inhouse e.g. catering.
Which document gives information on an organisation’s position at a particular time. It also assets, liabilities, and shareholder funds.
Balance sheet
What does DDP stand for and what does it mean?
Delivery Duty Paid - Goods are delivered to the buying organisation’s location of choice with all associated costs included and paid for by the supplier.
What does EXW stand for and what does it mean?
Ex Works - goods are required to be collected by the buying organisation from the suppliers’ premises.
……. made as result of increased levels of production, alternatively the financial benefit gained from purchasing more units of an item resulting in lower in lower unit costs.
Economies of Scale
What is a measure of profitability that indicates whether a gain or loss has been generated compared with the initial cost?
Return on Investment (ROI). This is used to make decisions about projects and investments. E.g. a company is considering launching a new product and will compare expected profits of the new product with expected profits in other products in development.
What does gearing measure?
Gearing ratios measure the cost and quality of the proportion of an organisation’s borrowing against its equity. An firm which is highly geared (high-cost debt) is considered a risk. Low gearing suggests a firm is relying on equity capital or low-cost debt options and is less of a risk.
