BUSS2 Key Terms

Key Formulas:

• Calculating Variances- Variance=budget figure- actual figure. 
• Net Profit Margin(%)= Net Profit Before Tax/Sales (Turnover) x 100 
• Return On Capital(%)=Net Profit Before Tax/Capital Invested x 100 
• Labour Productivity= Output Per Period/No Of Employees Per Period, this is the only one that is NOT a percentage. 
• Labour Turnover(%)= No Leaving A Business Over A Given Period/Average No Employeed Over A Given Period x 100. 
• Absenteeism(%)=No Of Staff Absent On One Day/Total No Of Staff x 100 
• Annual Rate Of Absenteeism(%)=Total No Of Days Lost Due To Absence During The Year/Total No Of Days That Could Be Worked x No Of Employees x 100 
• H&S Absenteeism(%)= No Of Working Days Lost Due To H&S/Total No Of Possible Working Days Per Year x 100. 

Definitions:

• Budget- Agreed plan establishing the policy to be used and the anticipated outcomes of that policy. 
• Variance Analysis- Actual and budgeted figures are compared and the reasons for differences (variances) are found. 
• Bank Overdraft- Agreement which allows holder to withdraw more money than there is within the account, amount is specified. 
• Short Term Loan- Sum of money provided for a specific agreed purpose. 
• Factoring- Factoring company (usually a bank) buys the right to collect the their money from credit sales. 
• Sale Of Assets- When a business transfers ownership of an item to a business or individual in return for cash. 
• Sale & Leaseback- Assets owned are sold to raise cash and then rented back for use. 
• Working Capital- The day-to-day finance used in a business consisting of assets.