LO4 - Be able to use financial information to check the financial health of businesses

Question 1

Fixed costs

Answer 1

Costs that do not change depending on the

Question 2

Variable costs

Answer 2

Costs that change depending on the output

Question 3

revenue

Answer 3

total income generated

Question 4

Cash flow

Answer 4

movement of money into and out of a business

Question 5

net cash flow

Answer 5

the difference between a business’s cash inflows and cash outflows over a specific period

Question 6

profit

Answer 6

revenue - costs

Question 7

break even point

Answer 7

fixed costs / (selling price - variable costs)

Question 8

Margin of safety

Answer 8

Actual sales - break-even sales

Question 9

Stakeholder

Answer 9

any person, group or organisation
which has an interest in a business because they are
affected by, or may be affected by, the activities of
that business.

Question 10

Examples of internal stakeholders

Answer 10

Owners, Employees and trade unions

Question 11

Examples of external stakeholders

Answer 11

Shareholders
Customers
Suppliers
Potential
Investors
Lenders
Local community
Pressure groups
entral and local government

Question 12

What is a trade union

Answer 12

Organization formed by workers to collectively protect and promote their rights and interests in the workplace.