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BUSINESS STUDIES
UNIT 2

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BUSINESS STUDIES UNIT 2
FINANCE

Budget=-agreed plan establishing in numerical or financial terms the policy to pursued and the
anticipated outcome of that policy.

Budget holder- a person who is accountable for seeing that a budget is kept to

Expenditure budgets- a fixed sum of money to…

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Improving cash flow

Cause of cash flow problems:

Lack of planning
Poor credit control- not checking properly who owes the business money properly
Bad debts- unpaid customers' bills that are now very unlikely to ever be paid
Allowing customers too long to pay debts
Overtrading- expending a…

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Measuring and increasing profit

Profit= total revenue- total costs

Profit margins- the profit made as a proportion of sales revenue

Gross profit= sales revenue- variable costs

Net profit= sales revenue- total costs

If a firm's gross profit increases AND there is no increase in fixed costs then…

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PEOPLE IN BUSINESS

Improving organisational structures

Organisational structure- the way the jobs, responsibilities and power within a business are
organised

Organisational chart- a diagram showing job title, lines of communication and responsibility within a
business

Levels of hierarchy- the number of layers of management and supervision existing…

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Workforce roles- the tasks involved in a particular level or
grade of job within an organisation
Supervisors- people who are directly responsible for one or Managers- employees who oversee the operations
more subordinate specific area of a business, they have to be confide
department as they look…

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If problems occur then businesses can use the de-layering method to get rid of any layers businesses
don't need to save costs, increase line of communication motivate staff, or have wide span of
control

For example: if HR manager is unhappy then they should add new managers…

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Give workers more responsibility so they take more pride in their work
Increase training
Change the reward system to improve motivation
Increase capacity

Absenteeism- number of working days lost as a result of an employee's deliberate or habitual
absence from work

Average number of staff absent in…

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