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Business L6 (hmm) > L6 Summer Exam > Flashcards

L6 Summer Exam Flashcards

1
Q

Revenue formula

A

Selling price per unit x number of units sold

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2
Q

Total Variable costs formula

A

Variable cost per unit x number of units sold

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3
Q

Total costs formula

A

Fixed costs + variable costs

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4
Q

Profit formula

A

Total revenue - total costs

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5
Q

Market capitalisation of a business, formula

A

Number of issued shares x current share price

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6
Q

Relationship between mission and objectives

A

A mission statement explains the company’s purpose and focus, while objectives outline a path for achieving the mission.

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7
Q

Common business objectives

A

Market share, profit, survival, growth, cash flow, social, ethical

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8
Q

Why do businesses set objectives?

A

Help to define goals, can guide the decision making

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9
Q

Reasons for choosing different forms of business

A
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10
Q

A company is

A

A business organisation that has its own legal identity and that has limited liability

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11
Q

Incorporation is

A

The process of establishing a business as a separate legal identity that allows it to benefit from limited liability

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12
Q

A shareholder

A

Is an investor in and one of the owners of the company

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13
Q

Limited liability and unlimited liability

A

Limited liability Means that in the event of financial difficulties, the personal belongings of shareholders are safe. And the opposite for unlimited

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14
Q

What are dividends

A

Are a a share in the profits of a company that are distributed to the holders of certain types of company shares

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15
Q

Net gain=

A

Expected value - initial cost of decision

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16
Q

Market growth (%) =

A

Change in the size of the market over a period/original size of the market X100

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17
Q

Market share (%) =

A

Sales of one product or brand or business/total sales in the market. X100

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18
Q

Added value formula

A

Sales revenue-costs of bought in goods and services

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19
Q

Labour productivity formula

A

Output over a time period/number of employees

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20
Q

Unit costs (average costs)=

A

Total costs/number of units of output

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21
Q

Capacity utilisation (%)=

A

Actual output/maximum possible output X100

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22
Q

Return on investment (%) =

A

Profit from the investment/cost of the investment. X100

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23
Q

Gross profit=

A

Revenue - cost of sales

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24
Q

1.Profit from operations=
2.profit for year=

A

1.Operating profit= gross profit-operating expenses
2.operating profit + profit from other activities - net finance costs - tax

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25
Q
  1. Private organisation
  2. Public organisation
A
  1. Private organisations benefit the owners, shareholders and investors. They are financed by private money from shareholders and by bank loans.
  2. Public organisations are owned by the government. They provide goods and services for the benefit of the community.
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26
Q

Market cap/capitalisation

A

Market capitalization refers to the total dollar market value of a company’s outstanding shares of stock.

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27
Q

Tannenbaum Schmidt model (autocratic - subordinate style of leadership) in order

A

Tell
Sell
Suggest
Consult
Join
Delegate
Abdicate

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28
Q

Blake mouton grid

A

Country club= high concern for people low concern for task
Impoverished= low concern for people low concern for task
Team leader= high concern for people high concern for task
Authoritarian=low concern for people high concern for task

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29
Q

Decision trees

A

Do some

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30
Q

Influences on decision making

A

External environment
Budgets
Availability and reliability of data
Attitude to risk, is it encouraged?

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31
Q

Role and importance of shareholders

A

The shareholder is the owner of the company that provides financial security for the company, has control over how the directors manage the company, and also receives a percentage of any profits generated by the company.

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32
Q

Stakeholder mapping (model)

A

Keep completely informed=high interest low influence
Manage most thoroughly=high interest high influence
Regular minimal contact=low interest low influence
Anticipate and meet needs=low interest high influence

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33
Q

Influences on relationships of stakeholders

A
34
Q

Market size formula.

A

Just have to guess off what’s int he question

35
Q

Outsourcing pros and cons

A

Pros:cheaper short term
Could be more efficient
Gives the company more time to focus on other matters

Cons: could sacrifice quality
Expensive long term
Could steal the ideas

36
Q

Marketing mix

A

Price
Promotion
Place
Product
(People)
(Process)
(Physical environment)

37
Q

Boston matrix

A

Star
Cash cow
Question mark
Dog

38
Q

E-commerce

A

E-commerce is the activity of electronically buying or selling of products on online services or over the Internet.

39
Q

Multichannel distribution

A

Multichannel distribution system is a method or structure in which a single company sets up two or more sales and marketing channels to reach one or more customer segments

40
Q

Economies of scale and diseconomies

A

Economies of scale are cost advantages reaped by companies when production becomes efficient. Companies can achieve economies of scale by increasing production and lowering costs. This happens because costs are spread over a larger number of goods. And the opposite for diseconomies.

41
Q

Capacity and capacity utilisation

A

It is the relationship between output that is produced with the installed equipment, and the potential output which could be produced with it, if capacity was fully used.

42
Q

Consequences of poor quality

A

Could lose customers, can also cause customers to take their business elsewhere, leading to job losses and a decrease in company productivity.

43
Q

Quality control and quality assurance

A

quality assurance relates to how a process is performed or how a product is made, quality control is more the inspection aspect of quality management.

44
Q

Flexible operations

A

A flexible organisation is one that is able to adapt and respond relatively quickly to changes in its external environment in order to gain advantage and sustain its competitive position.

45
Q

Inventory management

A

Inventory management helps companies identify which and how much stock to order at what time

46
Q

Inventory control charts

A

Highlights issues relating to inventory management such as the re-order level, re-order quantity, usage rates and lead time. PRACTISE SOME

47
Q

1.gross profit
2.operating profit
3.profit for the year

A

1.all profit made
2. the total income a company generates from sales after paying off all operating expenses
3. the profit made after all other operating expenses have been deducted from the gross profit.

48
Q

Cash flow objectives

A

Reduce borrowings
Minimise interest costs
Stay below limit for gearing

49
Q

Capital structure

A

The capital structure of a business refers to the balance of its finance in terms of how much is equity (or share capital) and how much is is in the form of debt.

50
Q

Variance analysis

A

A or F thing but have to work out first so try some out

51
Q

Debt factoring

A

Is when a business can go to the third party of the debt factored to chase up the business’s receivable in exchange for a percentage of the money from the receivable. The debt factorers get the receivable to pay quicker by threatening legal action. This can prevent poor cash flow

52
Q

Share capital

A

Money made from issuing and selling shares

53
Q

Venture capital is

A

Receiving financial support from a third party in exchange for a percentage of the business

54
Q

Retained profit

A

Retained profit is the amount of a business’s net income that is kept within its accounts, rather than paid out to shareholders.

55
Q

Methods of improving cash flow

A

Negotiate quick payment terms.
Give customers incentives and penalties.
Check your accounts payable terms.
Cut unnecessary spending.

56
Q

Common cash flow problems

A

Expecting profitability too quickly
Not creating a cash flow forecast
Collecting receivables too slowly
Low profit margins

57
Q

1.Gross profit margin (%) =
2.operating profit margin (%) =
3.profit for year margin (%) =

A

1.Gross profit/revenue x100
2.operating profit/ revenue x100
3.profit for year/revenue x100

58
Q

Variance =

A

Budgeted figure - actual figure

59
Q

1.Contribution per unit=

2.Total contribution =

A

1.Selling price - variance costs per unit

2.contribution per unit x units sold or. Total revenue - total variable costs

60
Q

1.Break even output=

2.margin of safety

A

1.fixed costs/contribution per unit

2.actual level of output - break even level of output

61
Q

Labour turnover (%) =

A

Number of staff leaving/ number of staff employed x100

62
Q

Employee retention rate (%) for a particular time period =

A

Number of staff who remained with the business for the period of time/ no. Of employees at the start of the time period x100

63
Q

Employee costs as percentage of turnover =

A

Employee costs / turnover x100

64
Q

Labour cost per unit =

A

Labour costs/ units of output

65
Q

1.ROCE (%) =

2.capital employed=

A

1.Operating profit/ total equity + non current liabilities

2.where total equity + non current liabilities

66
Q

Current ratio=

A

Current assets/ current liabilities

67
Q

Gearing (%)=

A

Non current liabilities/total equity + non current liabilities x100

68
Q

Payables days=

A

Payables/ cost of sales x365

69
Q

Receivables days=

A

Receivables/ revenue x365

70
Q

What is the resource mix?

A

The combination of capital and human resources utilised within a business to achieve the required output.

71
Q

New product development pros and cons

A

Pros:
. Essential to organic growth of the business/ survival
.if a brand has a reputation of positive product development consumers could be eager to try out the new product.

Cons:
. Products can fail unexpectedly
.external events can change procedures or haunt production
.a lot of time and resources can be put into development but they could fail when tested within the market.

72
Q

Product life cycle extension strategies

A

.Change product
.change price
.change place
.change promotion

73
Q

Why are extension strategies beneficial?

A

It can save time instead of developing new products, they can change one in the decline stage.

74
Q

How can profitability be improved?

A

reducing costs, increasing turnover, increasing productivity, and increasing efficiency.

75
Q

Taylor theorist:

A

Taylor believed that all workers were motivated by money

76
Q

Maslow theorist:

A

He proposed that humans have five tiers of needs: top level/self actualization, fourth level/esteem, third level/love and belonging, second level/safety needs, and bottom level/physiological needs like food and shelter.

77
Q

Herzberg theorist:

A

hygiene” and motivation. Hygiene issues, such as salary and supervision, decrease employees’ dissatisfaction with the work environment. Motivators, such as recognition and achievement, make workers more productive, creative and committed.

78
Q

Hackman and Oldham:

A

skill variety,
task identity,
task significant,
autonomy, and.
feedback

79
Q

Value of good employer/employee relations

A

employee productivity, engagement, motivation and morale tend to be much higher.

80
Q

What is sampling in market research

A

the process of creating a small unbiased population to be used in a test or experiment.
Pros:
. Realistic results on public opinion of the product

Cons:
. Lack of knowledge may mislead the results
.selection of good samples is difficult

Business L6 (hmm) (6 decks)

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