Brainscape's Knowledge GenomeTM

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


See full index

Business A-level > Unit 7-analysing the strategic position of a business > Flashcards

Unit 7-analysing the strategic position of a business Flashcards

1
Q

What is an income statement?

A

An accounting statement showing a firm’s revenues, costs and profits over a given year

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

What does the layout of an income statement look like?

A

Revenue
Cost of sales

Gross profit
Overheads/expenses
Exceptional items

Operating profit
Finance costs

Pre tax profit
Corporation tax

Profit for the year

Retained profit
Dividends

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

WhT is an income statement helpful for?

A 
Judge performance
Inform future strategic decisions 
Profit quality
See profit utilisation
Help get loans
Legal requirement for PLCs
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What is a balance sheet?

A

Shows à firms assets and liabilities on a given day

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

How does the layout of a balance sheet look?

A

Non current assets
Depreciation

Current assets
Current liabilities

Net current assets

Non current liabilities

Net assets

Equity

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

Why is the balance sheet useful?

A 
To assess liquidity
To inform strategic decision making
To see how investment has been raised
To see the value of the firm
To help raise finance
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What is return on capital employed?this measures profit made as a % of the money invested in the firm

A

this measures profit made as a % of the money invested in the firm

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

How do you calculate ROCE?

A

Operating profit/total capital employed. X100

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

What is current ratio?

A

Measures how many current assets a firm has compared to current liabilities

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

What is gearing?

A

Shows how much of a firm’s investment has come from borrowing

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

How do you calculate gearing?

A

Non current liabilities/ total capital employed. X100

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

What is inventory turnover?

A

Shows how often in one year a business sold its average stock of goods

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

How do you measure inventory turnover?

A

Cost of goods sold(or sales revenue) /average inventories

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

What is receviables days?

A

This shows how long on average it takes a firm to collect debts owed by customers

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

How do you calculate receivables days?

A

Receviables/sales revenue. X365

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

How do you calculate payables days?

A

Payables/cost of sales. X365

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

How do you answer a big question using these financial ratios?

A

Do calculations
Explain what the figures show
Judge whether good or bad for firm in Q
Say what you would also need to make a fuller judgement

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

What is a core competence?

A

A unique quality

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

What did prahalad and Hamal say about core competencies?

A

To be one it must be:
Significant for consumers
Allow firm access to variety of markets
Be hard to replicate

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

How can long term performance be measured?

A 
Brand image
Financial data
R and D spending
Spending on training
Profit quality
Customer satisfaction and brand loyalty
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

What is Kapton and Norton’s balanced scorecard?

A

A method of assessing a firm’s performance

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

What are the 4 categories of the balanced scorecard?

A

Financial
Customer value
Process performance
Learning and growth performance

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

What is Elkington’s Triple bottom line?

A

It looks at 3 areas of assessing long term performance

Profit
People
Planet

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

What are the positives of the methods of assessing overall long term performance?

A

Gives a fuller picture than just assessing financially
Can keep stakeholders happy as it shows an interest in them
Can develop methods of tracking performance in future

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
What are the negatives of the methods of assessing overall long term performance?
Can't measure everthing Some judgements are subjective, e.g. Planet Can be seen as purely a PR exercise Opportunity costs
26
Reasons for government intervention?
Prevents unethical behaviour Reduces environmental issues Keeps a 'level playing field' for businesses
27
Reasons against government intervention?
Protects, helps less efficient firms Increases 'red tape' and costs for U.K. Firms May argue business owners know best
28
What are the 3 key areas for laws?
Competition The labour market The environment
29
Give an example of a law for each of the different types of law areas
Competition act, e.g. Forbids cartel activity National minimum wage act The environmental protection act
30
What are the 4 main areas for government policy?
Towards entreprise - encouraging start ups, e.g. Enterprise finance guarantee Regulation - rules regarding how firms can operate in a market Infrastructure - improving transport, communication, energy supplies etc International trade - U.K. Government tries to promote free international trade
31
What is GDP?
Measures the value of a country's total output of good and services over a period of time, normally one year.
32
What is protectionism?
Government policy to prevent the free import of goods into a county
33
What is the exchange rate?
The value of one currency against another
34
Why do uk businesses generally want a weaker pound?
It makes it easier to export and more expensive for foreign imports
35
What is inflation?
The general rise in prices
36
Why do businesses generally prefer low inflation?
Helps maintain demand (especially if wages are rising by just as much) Stops their costs rising too quickly
37
What are interest rates?
Show the cost of borrowing
38
What is monetary policy?
Using interest rates and the supply of money to influence demand in the economy
39
Why is fiscal policy?
Using taxation and public spending to influence the economy
40
What is an emerging market?
Economies/ countries that are undergoing rapid industrialisation and economic growth
41
What are some benefits to the UK of emerging markets?
Huge new potential markets and sales Chance to offshore Spread of risk Access to cheaper raw materials
42
What are some drawbacks to the UK of emerging markets?
Competition from cheap imports IP theft China is now moving up the value chain Bad image from using cheap labour
43
On what will it depends pas to whether a firm can benefit or not from emerging markets?
Can they get an understanding of what consumers in these countries want Can they adapt marketing mixes Can they get through the red tape Do they have the liquidity Can they manage the potential diseconomies of scale of growing in a different country
44
what are the main current changes in the social environment?
Demographic changes - ageing population, increase in migration, increase in urbanisation e.g. China Consumer changes - increased use of tech worldwide, increased focus on healthiness, increase in online shopping
45
What is CSR?
The duties a business has towards its stakeholders
46
How does Carroll's CSR pyramid look?
Bottom - economics responsibilities, i.e. Being profitable - legal responsibilities - ethical responsibilities Top - philanthropic responsibilities responsibilities, i.e. Be a good corporate citizen
47
What are some of the potential long term benefits of taking a stakeholder approach?
Lower costs - happier staff, less wastefulness process TQM, avoid bad PR Increased demand - happy customers, marketing benefits e.g. Differentiation from rivals
48
On what does it depend as to whether a firm will benefit or not from a stakeholder approach?
Whether, financially, looking at the short or long term The firm's strategy, e.g. Cost minimisation means shareholder approach more likely The type of firm, e.g. An oil company could cause enormous problems if it didn't take a stakeholder approach
49
WHat are some possible outcomes benefits of embracing technology?
Increased short term costs, e.g. Buying it, redundancies | Hopefully long term benefits, e.g. More competitive, more sales, increased efficient, decreased costs
50
GIve some possible examples of change for the marketing department
Use of loyalty card for data Use of social media and relationships marketing Online selling and advertising Opens new distribution channels
51
GIve some possible examples of change for the operations department
Computer aided design CAD Computer aided manufacturing CAM Communications More efficient transportation
52
GIve some possible examples of change for the HR department
New methods of communication with staff Different ways of recruiting Workforce planning for fewer staff
53
GIve some possible examples of change for the finance department
Contactless/online payments | Record keeping - cloud
54
WHat are porter's five forces related to?
The competitive environment
55
What's are porter's five forces?
``` Bargaining power of suppliers Bargaining power of buyer Threat of new entrants Threat of substitute products Competitive rivalry ```
56
What is predator pricing?
Dropping prices to undercut rivals
57
What Is payback?
Shows how long it will take to recoup the investment money
58
How do you calculate payback?
See how many years of net cash flows it will take to recoup the original investment
59
What is ARR
Average annual rate of return - it shows the profit the investment should make as a yearly % of the amount invested
60
How do you calculate ARR?
(Total profit / number of years of returns) / Original investment X100
61
What is NPV?
Shows if the investment will give a positive return in real terms i.e. After inflation
62
How do you calculate NPV?
Net cash flow x discount factor ``` All NPVs (from years of investment added) - original investment ``` = actual NPV

Business A-level (10 decks)

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