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A level business UK > Paper 2 > Flashcards

Paper 2 Flashcards

1
Q

What are some internal finance sources?

A
  • Owners capital
  • Retained profit
  • Sale of assets
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2
Q

What are some advantages of internal finance?

A
  • Capital is available immediately
  • Cheap
  • No need to involve third parties
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3
Q

What are some drawbacks of internal finance?

A
  • Can be limited
  • Not tax deductible
  • Inflexible
  • No inflationary benefits
  • Opportunity cost
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4
Q

What are some external finance sources?

A
  • Family and friends
  • Banks
  • Peer to peer lending
  • Business angels
  • Crowd funding
  • Share capital
  • Venture capital
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5
Q

What are some factors affecting sales forecasts?

A
  • Consumer trends
  • Seasonal variations
  • Fashion
  • Economic growth
  • Inflation
  • Unemployment
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6
Q

What is time series data?

A

Allows businesses to predict future sales from past figures

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7
Q

what is the formula for break even?

A

Fixed costs/Contribution

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8
Q

What is the purpose of budgets?

A
  • Control/monitoring
  • Planning
  • Communication
  • Motivation
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9
Q

What is gross profit?

A

Revenue - cost of sales

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10
Q

What is operating profit?

A

Gross profit - operating expenses

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11
Q

What is net profit?

A

Operating profit - interest and exceptional costs

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12
Q

what is shareholders equity?

A

money owed to the owners of the business

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13
Q

What is working capital?

A

The money needed for the day to day trading of a business

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14
Q

What is liquidity?

A

The ease with which assets can be converted into cash

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15
Q

What are some reasons for business failure?

A
  • Lack of planning
  • Cash flow problems
  • Marketing problems
  • Failure to innovate
  • Lack of business skills
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16
Q

What is Job production?

A

-One product at a time

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17
Q

What is Batch production?

A

-One operation at a time on all units

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18
Q

What is Cell production?

A

Produce a family of products

19
Q

What is Flow production?

A

Production line

20
Q

What are some advantages of JIT?

A
  • Money not tied up in stock
  • Reduces waste
  • less stock holding costs
21
Q

What are some disadvantages of JIT?

A
  • Cannot respond to a sudden demand change
  • Bulk buying advantage lost
  • Late deliveries
22
Q

What are some external shocks?

A
  • Inflation
  • Deflation
  • Exchange rates
  • Interest rates
  • Taxation
23
Q

What are the SMART objective criteria?

A
  • Specific
  • Measurable
  • Agreed
  • Realistic
  • Time specific
24
Q

How do you draw ansoff’s matrix?

A

Existing and new market Y axis

Existing and new product X axis

25
Q

What is putting an existing product into an existing market

A

Market penetration

26
Q

What is putting a new product in a new market?

A

Diversification

27
Q

What is putting a new product in an existing market?

A

Product development

28
Q

What is putting an existing product into a new market?

A

Market development

29
Q

What are the elements of a pestle analysis?

A
  • Political
  • Economic
  • Social
  • Legal
  • Environmental
30
Q

What are some problems arising from growth?

A
  • Diseconomies of scale
  • Communication errors
  • Overtrading
31
Q

What are some reasons for staying small?

A
  • Personal service
  • Owner’s preference
  • Flexibility and efficiency
  • Lower costs
  • Low barriers to entry
  • Small monopolists
32
Q

What are some investment appraisal methods?

A
  • Simple payback
  • ARR
  • Discounted cash flow
33
Q

What are some Influences on business decisions?

A
  • Corporate influence
  • Corporate culture
  • Stakeholders
  • Ethics
34
Q

What is a power culture?

A

Central source of power

35
Q

What is a Role culture?

A

-Well established roles/procedures

36
Q

What is a task culture?

A

Power is given to those who can accomplish tasks

37
Q

What is a person culture?

A

Number of individuals have expertise but don’t work together

38
Q

What are some stakeholders?

A
  • Owners
  • Employees
  • Managers/directors
  • Customers
  • Creditors
  • Suppliers
  • Government
39
Q

What is ethics?

A

Considering the moral “rights and wrongs” of decisions

40
Q

What is net assets?

A

All assets - all liabilities

41
Q

What is the gearing ratio?

A

Non current liabilities/capital employed X 100

42
Q

What is ROCE ratio?

A

Operating profit / Capital employed X 100

43
Q

What is capital employed?

A

Total assets - Current liabilities

A level business UK (8 decks)

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