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Business > Managing Business Activities > Flashcards

Managing Business Activities Flashcards

1
Q

What is a Cash Flow Forecast?

A

A diagram displaying the movement of cash in and out of the business

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2
Q

Cash Flow formula

A

Cash Flow = Inflow - Outflow

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3
Q

Formula for Profit

A

Profit = Revenue - Costs

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4
Q

What is Sales Volume?

A

It is the number of times a product has been sold

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5
Q

What is Sales Value?

A

It is the amount of money the product is producing in the market\

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6
Q

What is the purpose of Sales Forecasting?

A

To plan costs of employees and to manage Resources

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7
Q

What are Social Factors that affect Sales Forecasts?

A
  • Consumer trends
  • Shopping habits
  • Demographics
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8
Q

What are Economic Factors that affect Sales Forecasts?

A
  • Interest rate
  • Employment
  • Stages in Economic Cycle (Period of
    BOOM and Period of Recession)
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9
Q

Difficulties of Sales Forecast

A
  • The future is unpredictable
  • Lack of precise information due to
    unpredictability in market
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10
Q

Revenue Formula

A

Revenue = Cost x Quantity of sales

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11
Q

What is a Supply and Demand graph?

A

It is a graph displaying the effects of supply and demand on the price, quantity of products and the amount of revenue a company will receive.

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12
Q

Break Even formula 1

A

fixed cost/contribution

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13
Q

Break Even formula 2

A

fixed cost/contribution per unit

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14
Q

Meaning of Break Even?

A

It is the point when a companies’ total revenue equals the total cost meaning there is no profit or loss being made

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15
Q

Contribution formula

A

contribution = selling price - variable cost per unit

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16
Q

Weaknesses of break even graph

A
  • based on predictions
  • ignores changes in variable costs
  • only indicates how many units are needed
    to sell but does not actually sell them
17
Q

Strengths of Break Even graph

A
  • Allows business to calculate number of
    units needed to sell for the business to be
    viable
  • It helps decision making
  • Provides a target
18
Q

What is Boston Matrix?

A

Its a square graph displaying what products are doing and what they aren’t

19
Q

What are the 4 aspects of a Boston Matrix?

A
  • Cash Cow
  • Stars
  • Dogs
  • Question Marks
20
Q

What is a cash cow product?

A

A product that generate more money than what is invested into them

21
Q

What is a star product?

A

A product with a high market share in a high growth market

22
Q

What is a problem child/question marks

A

Low share of a high growth market ( they consume more resources than they produce but have a lot of potential )

23
Q

What are Dog products?

A

Low share of a low growth market

24
Q

What is the Margin of Safety?

A

The amount of units sold or produced after the break-even point

25
Q

Design mix

A

3 elements a business must consider when developing a product or service

26
Q

What are the 3 components of a design mix?

A
  • aesthetics
  • cost
  • function
27
Q

What are factors that affect how a product would be placed on the design mix?

A
  • social trends
  • different markets will have different uses for the same thing
28
Q

How can a business stay ahead of the factors affecting how a product places on the design mix?

A

Market Research

29
Q

Difference between profit and cash?

A
  • time (profit is measured yearly meanwhile cash is measured day to day)
  • cash = liquidity meanwhile profit = profitability
30
Q

What is PED?

A

Price elasticity of demand

31
Q

What is YED?

A

Income elasticity of demand

32
Q

What does income elasticity of demand (YED) mean?

A

The responsiveness of demand to a change in income

33
Q

What does price elasticity of demand (PED) mean?

A

The responsiveness of demand to a change of price

34
Q

What is formula for YED?

A

% change in quantity demanded / %change in income

35
Q

What formula for PED?

A

% change in demand / %change in price

36
Q

Formula for contribution

A

Selling price per unit - variable cost per unit

37
Q
A

Business (7 decks)

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