Mrs Berry Flashcards

1
Q

What is capacity utilization?

A

Adjusting the price of a good or service according to the demand at that current time (in order to maximize sales at any given time)

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2
Q

what is the formula for capacity utilization?

A

current capacity/maximum capacity*100

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3
Q

what is the difference between leadership and management?

A

management is doing things right and leadership is doing the right things

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4
Q

what are the two different types of decision making?

A

scientific and intuition

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5
Q

describe scientific decision making

A

using quantifiable data and using logical thought processes but might be time consuming and expensive

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6
Q

describe intuition decision making

A

quick decision making using creativity and innovation, difficult to justify and relies on experience

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7
Q

what is the Tannenbaum Schmidt continuum?

A

a leadership model based on a scale for which both extremes of leadership style are represented for managers and everything in between

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8
Q

how is the Tannenbaum Schmidt continuum measured?

A

on a scale of 1-7 with 1 being no delegation to decisions(autocratic) and 7 being highly inclined to delegate decisions to others(laissez faire)

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9
Q

what are the 4 leadership styles?

A

autocratic, paternalistic, demographic and laissez faire.(tells, sells, consults participates)

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10
Q

Describe autocratic leadership.what are its strengths and weaknesses?

A

the leader gives orders which they expect to be followed precisely-easy and quick decision making but staff will not question them so mistakes may slip through

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11
Q

Describe democratic leadership.what are its strengths and weaknesses?

A

democratic leadership empowers employees to make a decision- staff are involved in discussions, however not everyone will always agree so some are unhappy

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12
Q

Describe paternalistic leadership.what are its strengths and weaknesses?

A

semi authoritarian control, still makes the main decisions- high employee loyalty because hry trust your good intentions but making tough decisions is harder because it will affect your colleagues that you care about maybe.

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13
Q

Describe Laissez faire leadership.what are its strengths and weaknesses?

A

Live and let be, team led discussions and they participate after presenting an idea- empowers staff but you could be over turned

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14
Q

what is opportunity cost?

A

the loss of one alternative because you chose the other

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15
Q

what is the difference between scientific and intuition decision making?

A

scientific is supported by quantifiable evidence, encourages logical thought process and may require expensive data. Intuition allows for quick decision making, encourages creativity and innovation, difficult to justify and relies on experience and expertise

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16
Q

what is a stakeholder map?

A

similar to a market map, it will assess how important each stakeholder is relating to a business action/decision. it is measured by the power they have over the business and the level of interest they have.

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17
Q

what are examples of financial objectives.

A

return on investment, capital structure, revenue, costs, profits and cashflow

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18
Q

what is ROI about?

A

Return on investment is a measure of profitability and performance. it is set as a percentage

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19
Q

what is the formula for ROI?

A

operating profit/ capital invested X100

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20
Q

what is cost of sales another word for?

A

variable costs

21
Q

what is expenses another word for?

A

fixed costs

22
Q

what is operating profit?

A

gross profit - expenses

23
Q

what is profit for the year (end profit)?

A

operating profit - interest and taxation

24
Q

what is gross profit?

A

sales revenue - cost of sales(variable costs)

25
Q

what is capital structure?

A

The proportion of long term funding that is debt

26
Q

what is the minimum time period required for capital structure

A

more than a year

27
Q

what are the two sources of long term funding regarding capital structure

A

equity and debt.

28
Q

what is the formula for gearing?

A

debt/total long term funding X100

29
Q

what are the internal influences on internal objectives?

A

how much money they have, firms characteristics, relationships between owners and directors and whether they are in the public or private sector

30
Q

what are the external influences on internal objectives?

A

interest rates, competition, consumers and external environment

31
Q

what are the three types of budgets?

A

income , expenditure and profit

32
Q

what is the loop for setting budgets?

A

set clear objectives-carry out market research-produce a sales forecast- set income budget-set expenditure budget- set profit budget- set divisional targets- review against objective-

33
Q

what is variance?

A

the difference between predicted budget and actual budget

34
Q

causes of variances are?

A

change of supplier, competitors unexpected change in demand, change of interest rates, increase to minimum wage and special promotions (of products)

35
Q

what are the benefits of budgeting?

A

gives a target to work towards, check if managers are keeping spending under control, assess if the business is operating efficiently, informs decision making and you can se where cuts or extra funds need to be cancelled

36
Q

what are the drawbacks of budgeting?

A

potential conflict, lack of transparency, short term saving may damage long term objectives, may be restrictive, opportunities might be missed and its time consuming

37
Q

What is the formula for Break even?

A

FC / Contribution (SP-VC)

38
Q

What is total contribution?

A

the difference between total sales revenue and total variable costs

39
Q

What are the strengths of using Breakeven?

A

Provides a target for sales, You can predict the outcome of your cash flow when changing variables like the price level, Aids decision making

40
Q

What are the drawbacks of breakeven?

A

based on predictions, Even fixed costs can change in the long run, It does not ensure actual sales will materialise to your your predicted forecast.

41
Q

What is profitability?

A

measures the financial performance of a business by comparing profits achieved to a second variable.

42
Q

What are ways of measuring profitability?

A

operating profit margin, gross profit margin, profit margin for the year and ROI

43
Q

What does the gross profit margin look at?

A

the relationship between the gross profit and sales revenue

44
Q

What does the operating profit margin tell you?

A

if the OPM is falling either expenses are not being managed or sales are declining

45
Q

What does the end of year profit margin tell you?

A

if he end of year profit is falling either gross or operating profits are decreasing or interest rates have changed

46
Q

How do you improve profitability ?

A

sell the same quantity at a higher price, sell more at the same price or sell the same quantity at the same price but with lower costs

47
Q

what are the cash inflows?

A

cash sales, payments from debtors, owner’s capital invested, sale of assets and a bank loan

48
Q
A