May 2019 P1 Flashcards
What are some methods of secondary market research?
Government reports
Analysing existing data
What are some financial objectives for a business?
Increased market share
Increase revenue
Increase profit
Reducing costs
External sources of finance?
Bank loans
Crowdfunding
Venture capital
Hire purchase
Which functional area is responsible for quality control?
C – Production
If €1 = 124.48 Ks, how much does an item costing €20 cost in Ks?
2,489.60 Ks
If the exchange rate changes from €1 = 124.48 Ks to €1 = 117.79 Ks, what happens to the cost of importing €20 items?
The cost of importing would fall
Define the term ‘stakeholder.’
Individuals or groups with an interest in the success or failure of a business
What is quantitative data?
Data that is measured by value and expressed in numbers
State one method of on-the-job training.
Shadowing a colleague / Observing tasks in real-time
Calculate the gross profit margin if revenue is 570,000 Ks and gross profit is 500,500 Ks.
0.8781
Explain one way to increase gross profit margin.
Negotiate cheaper supplier deals to reduce costs and boost sales
Explain the importance of satisfying customer needs.
Retains customers, builds loyalty, increases sales and revenue
State one fringe benefit an employer could offer employees.
Discounts, free uniforms, company car, health insurance
State one benefit of off-the-job training.
Gain qualifications or skills outside regular work tasks
Explain one reason businesses have a human resource functional area.
To recruit, train, and manage employees effectively
Explain one method of above-the-line promotion.
TV advertising: reaches wide audience and boosts product awareness
Explain one way to extend the product life cycle.
Change packaging or rebrand to attract new and repeat customers
Evaluate the effectiveness of financial rewards vs job enrichment for motivation.
Financial rewards boost short-term performance; job enrichment improves engagement but may not suit all employees
Define the term ‘profit.’
Profit is the difference between total revenue and total costs.
Explain one impact of an increase in interest rates on a business.
Sales may fall as customers with loans have less income to spend on non-essentials.
Calculate the break-even output if fixed costs = 100,000 and contribution per unit = 800.
125 units (Break-even = 100,000 ÷ 800)
Explain the importance of break-even analysis.
Helps set sales targets, determine pricing, and assess risk by showing the sales needed to cover costs.
Evaluate overdraft vs crowdfunding as sources of finance.
Overdraft: flexible but costly and repayable anytime. Crowdfunding: helps cash flow but high risk of failure.
Calculate the net profit margin if net profit is 800 and revenue is 2,400.
33% (Net profit margin = (800 ÷ 2,400) × 100)
Explain the importance of profitability ratios.
Shows how much profit is made from revenue, helps decision-making and attracts investors.
Evaluate the use of primary market research compared to secondary market research.
Primary research: specific and up-to-date but expensive and time-consuming. Secondary research: cheap and fast but may be outdated or irrelevant. Conclusion: Primary is more tailored, secondary is more efficient—best to use both.
