Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Business studies > papaer 2 > Flashcards

papaer 2 Flashcards

1
Q

internal finance

A

finance from insiode the business

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

external finance

A

finance from outside the business

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

pros of internal finance

A

no loss of control
no interest paid

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

pros of external finance

A

usually greater sums of finance can be generated b

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

cons of internal finance

A

oppurtunity cost

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

cons of external finance

A

loss of control
pay interest

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

personal savings

A

when an entreprenuer uses personal finances to finance the business

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

what is personal savings used for

A

long term finance
internal finance
new/start up business

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

pros of personal finance

A

no financial cost
easiest and quickest source of finance

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

cons of personal finance

A

likely to be limited
if business does not immedialey make profits there will be pressure

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

retained profits

A

when a business uses historical profits from previous years to invest

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

why use retained profit

A

long term finance
internal finance
usually established business

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

pros of retained profirs

A

no financial cost
no control given up
safe low risk approach

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

cons of retained profit

A

may create conflict
usualyy finite profit
no “expertise added”

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

selling fixed assets

A

raising cash via the sale of surplus of fixed assets

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

cons of selling fixed assets

A

only a finite amounts of times you can do it
risk in not being able to find the buyer or a fair value

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

pros of fixed assets

A

not a form of debt
no control given up
quick form of cash

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

why use bank loans

A

external finance
commonly used for new businesses

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

bank loan

A

when a business borrows a sum of money and pays it back with interest over an agreed period of time

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

pros for loans

A

no shares in business given up
interest rates lower than overdraft
may improve credit score

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

cons of a bank loan

A

assets will be taken if you fail to repay
no flexibility
fail to pay will worsen credit score

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

how to calculate interest

A

total payment - borrowed amount divided by borrowed amount x 100

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

pros of crowd funding

A

no payments need to be made
excellent exposure
good feedback

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

crowdfunding

A

raising finance from a large amount of people all receiving a small amount of shares

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

cons of crowd funding

A

if profits are made they will be shared
risk of reputation if failure
investors may have limited expertsise

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

new share issues

A

when a plc issues shares in exchange for a payment

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

pros of new share issue

A

no interest
stock exchange

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

cons of selling shares

A

give up share of business
expected to pay shareholders dividends

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

vanture capital

A

a type of finance offered by a vc fund to high risk high reward firms in exchange for shares in business

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

pros of venture capital

A

makes expansion possible
no repayment
reduce personal risk

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

cons of venture capital

A

given up share of business
may lose control if more than 50% is given up

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

overdrafts

A

when a business withdraws more cash than it holds (gone negative)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

pros of overdarfts

A

quick and simple to organise
can be tailored to the business

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
31
Q

cons of overdrafts

A

banks could cancel overdarft at any time
higher interest rates than loans

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
32
Q

trade credit

A

when you buy raw materials from suppliers today but pay later

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
33
Q

pros of trade credit

A

simple to arrange and maintain if credit terms are met

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
34
Q

cons of trade credit

A

risk of spoiling relationship
large fine if you pay late

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
35
Q

grants

A

financial award given by the government. local council or charity

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
36
Q

pros of grants

A

non repayable
no control given up

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
37
Q

cons of grants

A

time consuming process
grant tied to certain conditions

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
38
Q

unlimited liability

A

owner and business is the same legal entity, therefore the owner is responsible for all debts the business incures

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
39
Q

limited liability

A

owner and business are different legal entities therefore assets are not at risk in the event of the business incurring debts

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
40
Q

budgeting

A

compare against actual figures, showing an adverse or favourable situation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
41
Q

pros of budgeting

A

gives seniors spending guidance
helps increase chance of finance

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
42
Q

cons of budegeting

A

who set the budget? - no expertise]over ambitious targets
historical budgets are based on previous years
how frequently are they reviewed

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
43
Q

adverse

A

profits are lower than expected
revenues are lower than expected
costs are higher than expected

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
44
Q

favourable

A

profits are higher than expected
revenues are higher than expected
costs are lower than expected

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
45
Q

business plans

A

a document explaining what a business intends to do

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
46
Q

what does the business plan include

A

summary
aims and objectives
operations
finances

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
47
Q

pros of business planning

A

helps understand finances
increases chances of loans
allows closer inspection of business areas

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
48
Q

cons of business plan

A

only a plan, reality is different

who did the plan and do they have expertise

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
49
Q

cash flow forecasts

A

helps predict when you may have a liquidity problem

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
50
Q

pros of cash flow forecasts

A

useful to see if you do or don’t have a good amount of cash

anticipate cash flow issues
manage cash flow issues

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
51
Q

why poor cash flow happens

A

poor sales
over trading
poor business management

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
52
Q

why poor cash flow is an issues

A

not enough cash for 2 day expenses
cannot pay wages
indicates need for finance

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
53
Q

solutions to cash flow problems

A

rescheduling payments
increase cash inflows
decrease cash inflows
sources of finance (overdraft)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
54
Q

break even output calculation

A

fixed costs divided by sales price- variable cost per unit

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
55
Q

revenue at break even point caluclation

A

break even output x sales price

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
56
Q

pros of break even analysis

A

useful tool for management
highlights the importance of fixed costs
data generated can be used in a business plan

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
57
Q

cons of break even analysis

A

based on predicted data not actual data
many unrealistic assumptions-
.one price used
.no waste
.all units produced are sold

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
58
Q

gross profit margin calc

A

gross profit divided by revenue x 100

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
59
Q

statement of finacial position

A

a snapshot of a companys equity, assets and liabilities at a single point

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
60
Q

pros of a positive cash flow

A

able to pay suppliers on time
employees on time
handle unforseen events
expansion

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
61
Q

consequences of a poor cash flow

A

cant pay on time
cant handle externalities
less growth

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
62
Q

gross profit

A

revenue - direct costs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
63
Q

operating profit

A

gross profit - indirect costs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
64
Q

net profit =

A

operating profit - interest and taxes

65
Q

current ratio

A

current assets divided by current liabilities

66
Q

types of current assets

A

cash
stock

67
Q

operational objectives

A

reducing unit costs
increase quality
response speed + flexibility
dependability
environmental
created added value

68
Q

job production

A

one off production to meet the customers needs

69
Q

examples of job production

A

ship building
personal tainer
tailored suit

70
Q

pros of job production

A

higher quality
unique to customer
workers aren’t bored so motivation high

71
Q

cons of job production

A

cost per unit is high
need high% of labour

72
Q

batch production

A

batch production into groups- limited quantities of identical products

73
Q

pros of batch production

A

productivity up
economies of scale up
flexibility up
risk down

74
Q

flow production

A

continuous production to produce many identical products. usually on an assembly line for mass market

75
Q

pros of flow production

A

produce more to meet demand
workers can specialise in one activity
eos

76
Q

cons of flow production

A

need to buy capital
workers bored of repetitive work
not as flexible

77
Q

average unit costs calc

A

totals costs divided by units sold

78
Q

labour productivity

A

amount of output produced per unit of labour output

79
Q

labour productivity calculation

A

output over a time period divided by number of employees

80
Q

how to increase labour productivity

A

new capital
train employees
motivational theories
adapt management style

81
Q

importance of higher labour productivity

A

efficicny up
cpu down
prices down
competetivness up

82
Q

barriers to labour productivity

A

resistance from employees
cost of training
motivation impacts
quality impacts

83
Q

buffer stock level

A

stocks the business intends to hold

84
Q

pros of buffer stocks

A

manage uncertainty
negotiate a better deal with suppliers

85
Q

cons of buffer stock

A

high storage costs
wastage ?

86
Q

lean production

A

about reducing waste which increases efficiency and productivity

87
Q

types of waste

A

too much stock held
high defects
high fluctuation
too large a factory

88
Q

just in time

A

exact , stock arrives when needed

89
Q

kaizen continuous improvement

A

keep improving bit by bit in production process

90
Q

cell production

A

teams of workers completing whole tasks in close proximity

91
Q

quality control

A

a system to ensure a final good or service meets a certain level of quality

92
Q

pros of quality control

A

avoids selling defect goods
checks occur after production process

93
Q

cons of quality control

A

increases costs
doesnt help prevent waste

94
Q

quality assurance

A

when systems are used to prevent defects from occurring

95
Q

pros of quality assurance

A

decreased defects and wastage
lower defects means better reputation

96
Q

cons of quality assurance

A

costs higher
may slow down production
demotivating potentially

97
Q

tqm

A

improving the product quality by being customer focused

98
Q

pros of tqm

A

improve quality of end product
increase cutomer loyalty
increase employee motivation

99
Q

con of tqm

A

takes time to see real impact
resistance

100
Q

inflation

A

sustained increase in prices in an economy

101
Q

impact of inflation on finance

A

real value of debt eroded
assets appreciate in value

102
Q

inflation effect on marketing

A

higher revenues
brand down

103
Q

inflation on operations

A

cost of raw materials likely to inncrease
suppliers may increase
increase prices= qd down

104
Q

inflation on human resouces

A

workers real wage may fall

105
Q

pros of just in time

A

reduce waste
greater productivity

106
Q

cons of just in time

A

higher average unit cost
very reliant on supplier
risk of failing to meet unexpected demand

107
Q

capacity utilisation

A

actual output diivded by max output x 100

108
Q

mission statement

A

written description about the organisation so stakeholders know intent

109
Q

examples of mission statements

A

aims, corporate aims, values, mission

110
Q

corporate objectives

A

define overqall objectives of the business eg. prof max sales max break even

111
Q

functional objectives

A

define objectives of each department

112
Q

why have heirarchy of objectives

A

measure of sucess
coordination in layers

113
Q

4 parts of ansoffs matrix

A

market penetration
product development
market development
diversification

114
Q

market penetration

A

ezisting product
existing products

115
Q

product development

A

new prodct
existing market

116
Q

market development

A

new market
existing product

117
Q

diversification

A

new product
new market

118
Q

external enviroment

A

influences on cost and demand

119
Q

external influences

A

competition
market conditions
interest rates
demographic factors
enviromental issues

120
Q

swot analysis

A

a strategic planning tool used before a business uses a strategy

121
Q

what does swot stand for

A

strengths
weaknesses
opportunities
weaknesses
threats

122
Q

key points of swot

A

unique to each business
constantly changing
regular updates
not a grantee of success

123
Q

pestle analysis

A

help recall the external factors that may impact a business

124
Q

porters 5 forces

A

threat of entry
buyer bargaining power
threat of substitutes
supplier bargaining power
rivalry

125
Q

porters generic strategies

A

tool to help managers to strategically position themselves within the market

126
Q

what are porters generic strategies

A

low cost - differentiation
broad- narrow competition

127
Q

avaerage unit costs calculation

A

total costs divided by units sold

128
Q

economies of scale

A

as output increases average costs decreases

129
Q

diseconomies of scale

A

once a business gets pasta certain point, output increases causes average cost to increase

130
Q

reasons for diseconomies of scale

A

laziness and wastage

131
Q

correlation

A

understanding the strentgh of a relationship

132
Q

extrapolation

A

using historical trends to predict future trends

133
Q

pros of extrapolation

A

usefull ton predict future
aids decision making

134
Q

cons of extrapolation

A

external factors may change

135
Q

confidence intervals

A

a range of values that data suggests something is likely to occur within

136
Q

external growth

A

growth from outside the business

137
Q

mergeres

A

consolidstion of two entities

138
Q

takeovers

A

one business takes control of another

139
Q

why do a merger or takeover

A

gain economies of scale
increase market share
secure supplies
reduce risk
acquire knowledge
access to more consumers

140
Q

backward vertical intergration

A

expanding operations by moving closer to its suppliers or sources of raw materials

141
Q

why backwards integration

A

more control of supply chain
reduce dependency on external suppliers

142
Q

forward vertical intergration

A

expanding operations by moving closer to the consumer

143
Q

pros of forward vi

A

more control of outlets
more control off distribution

144
Q

horizontal intergration

A

expanding by merging in same industry with same product

145
Q

pros of horizontal v

A

increase market share
achieve economies of scale

146
Q

conglomerate intergrationn

A

expanding into unrelated industries

147
Q

internal growth

A

growth from within the business

148
Q

decision trees

A

tools helping business to make a decision

149
Q

dividends

A

a distribution of the profits to shareholders

150
Q

corporate social responsibility

A

the responsibilities of an organisation to put initiatives in place to benefit society

151
Q

reasons for corporate social responsibility

A

improved brand image
incrased sales
improved economic performance

152
Q

reasons against csr

A

costs are high
less profitable for smaller orgaisations

153
Q

stakeholder

A

aytone with an interest in the business

154
Q

shareholders

A

anyone who owns a share of the company

155
Q

consumer spending

A

the total amount of household expenditure on goods and services in the economy

156
Q

liquidity ratio

A

measures the ability of a business to pay off its current liabilities without using its inventory

157
Q

gearing ratio

A

how much of a firms capital employed is made up of non-current liabilities

158
Q

profitablity ratio

A

how efficiently finance is being used

159
Q

Power culture

A

decisions made by a select few people

160
Q

role culture

A

formalised roles, jobs and procedures

161
Q

task culture

A

focus on specific tasks

162
Q

person culture

A

workers have freedom to act independently

Business studies (3 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2025 Bold Learning Solutions. Terms and Conditions