Revision lesson 6 - paper 2 Flashcards
What is a current asset
Assets turned into cash within a year
What is a benefit of cash flow forecasting
Predict surplus or shortages and plan for them
What is a disadvantage of cash flow forecasting
Cannot predict external shocks
What is net current assets also known as on a balance sheet
Working capital (current assets - current liabilities)
How is margin of safety calculated
Actual output - breakeven output
What are examples of non current liabilities
Bank loan, mortgage
What are 2 examples of current assets
Cash, stock
What is the formula for capacity utilisation
CU = (actual output / max possible output) x 100
What is the formula for labour productivity
LP = output / no. of workers
What is the formula for break even
BE = fixed costs / CPU
What is the formula for net current assets
NCA = Current assets - current liabilities
What is the formula for gearing
G = (non current liabilities / capital employed) x 100
What is the formula for capital employed
CE = Total equity + non current liabilities
What is the formula for ROCE
ROCE = (operating profit / capital employed) x 100
What does SWOT stand for
Strengths, weaknesses, opportunities, threats
What is an objective
A target for a business to achieve its long term aims
What is a mission statement
Brief statement describing the businesses purpose and values
What is a corporate objective
The objectives of a business as a whole
What is a corporate strategy
Plans and policies to achieve objectives
