Unit 7 business Flashcards
Vision statements
sets out what a business wants to be in the future
cooperate objectives
medium to long term goals usually set after a mission statement
external influences on corporate objectives
state of economy , global prices , migration
internal influences on cooperate objectives
poor performance , business culture
short termism
pressure to deliver results
advantages of swot
low cost and straight forward can be used by all business
encourage managers to think internal and external
recognises risks and weaknesses that a business can deal with
disadvantages of swot
does not provide any judgement to how important they are
data provided must be solid and reliable
tangible assets
assets with a physical form
working capital
amount of money available to pay day to day expenses ( current assets - current liabilities )
balance sheet
financial information displaying a businesses inflows and outflows
high quality profit
profit that will continue the following year
ratio analysis
technique for analysing a business financial performance
return on capital employed (ROCE)
compares operating profit with the amount of capital employed by the business = operating profit /(total equity + non current liabilities )x 100
current ratio
how much you have to how much you owe = current assets / current laibilities
gearing ratio
measures long term liquidity of a business = non current liabilities/ ( total equity + non current liabilities ) x100
inventory turnover
Cost of good sold / (average inventories sold )
receivable days
receivables / revenue x 365
payables days
payables / cost of sales x 365
core competencies
unique qualities that a business has that provide it with competitive advantage
elkingtons triple bottom line
a way of thinking about a business social responsibility ( profit , people , place )
profit ( ETL)
profits will help the broader community in which the business operates
people(EKL)
measures the impact that a business may have on all the people involved
planet ( EKL)
minimising impact on environment
investment appraisal ( payback )
number of years for earnings from investment to equal original cost
ARR
annual percentage return on each possible investment
total profit / No. of years = average annual profit
average annual profit / cost of investment x 100 = ARR