Unit Two Business Studies

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  • Created on: 21-05-11 13:07

Unit Two Business - Finance 

Using Budgets :

Variance -  the difference between a budgeted figure and the actual figure and the actual figure achieved.

Variance analysis - is the comparison by an organisation of its actual performance with its expected budgeted performance over a certain time period.

Favorable variance-   this is a change from a budgeted figure that leads to higher than expected profits.

Adverse variance -  this is a change from a budgeted figure that leads to higher than expected profits.

Improving Cash Flow:

Creditors - suppliers owed money by the business - purchases have been made on credit.

Credit Control - the monitoring of debts to ensure that credit periods are not exceeded. 

Bad Debt - unpaid customer bills that are now very unlikely to ever be paid.

Over-trading - expanding a business rapidly without obtaining all of the necessary finance so that a cash flow shortage develops. 

Measuring and Increasing Profit :

Profit Margin -

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