Business Studies Mock Revision

Current Ratio Formula
Current Assets/Current Liabilities
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Acid Test Ratio Formula
(Current Assets - Stock) / Current Liabilities
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Return On Capital Employed (ROCE) Formula
(Operating Profit / Capital Employed)*100
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Gross Profit Percentage Formula
[(Sales - Costs of Sales) / Sales Revenue]*100
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Corporate Culture Definition
Grow from shared values, attitudes, standards and beliefs that characterise an organisation and define it's nature
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Culture Clash Definition
When there is a merger or takeover and it creates tension due to two different cultures coming together
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What Does PESTLE Stand For?
Political, Environmental, Social, Technological, Legal and Economic
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PESTLE Analysis Definition
A system that identifies external factors that could affect the business but are beyond it's control
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What is the difference between Political and Legal in PESTLE?
Legal and force a business to change whereas political can't
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Ways of Increasing Productivity?
Financial Rewards, Employee Share Ownership, Consultation, Empowerment, Improved Training, New Technology
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Advantages of Increasing Productivity
Increases output without increasing unit costs (avoids diseconomies of scale and reduces amount of staff needed)
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Definition of Decision Trees
A diagram which shows all possible outcomes of a decision, together with the estimated probability and expected monetary value of each of these outcomes
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What do Square Nodes Represent in a Decision Tree?
Decisions to be made
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What do Circle Nodes Represent in a Decision Tree?
Possible outcomes of a decision
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Advantages of Decision Trees
Encourages discipline in decision making, Considers probability and monetary returns so reduces 'best case scenario' thinking, Promote quantitive analysis and an understanding of uncertainty, promote discussion
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Definition of stock
Supplies of inputs used in production and finished products waiting for sale
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Formula for Capital Employed
Long term liabilities + equity
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Definition of Stock Control
The process of making sure the optimum level of stock is held so that demand can be met while keeping the costs of holding that stock to a minimums
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Definition of Buffer Stock
Levels of stock kept just in case there is a problem with delivery etc.
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Problems with having too much stock
Increased costs in storing and handling stock and cash could be used elsewhere
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Problems with having too little stock
May run out and halt production and may cause a loss of customers/worsened brand image
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Definition of Just In Time stock management (JIT)
A stock control system that does away with the need to hold large quantities of stocks or raw materials. Stocks arrive as and when they are needed.
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Advantages of JIT
Storage space can be used for production, Cash flow improves, Cash is freed up, Less waste as less chance of damage during storage and business can quickly adapt to demand changes
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Disadvantages of JIT
Needs to be monitored carefully, Needs a good working relationship with suppliers, Less likely to benefit from bulk buying economies of scale, The system failing causes delays
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Definition of Waste Minimisation
Increasing productivity by examining every stage of production or operational systems to see if they can be improved
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Areas of Waste Minimisation
Under-used resources, Movement of stock, Movement of people, Energy use, Production flow, Stock levels, Defects and faulty products, Waiting times
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Definition of Lean Production
A general term given to any system of production that tries to minimise waste during the production process. It helps to reduce costs.
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Features of Lean Production
TQM, Kaizen, Flexibility, Lead Times, Lean Suppliers, Waste Minimisation and JIT
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Definition of TQM
(Total Quality Management) a system whereby everybody thought the business takes responsibility for quality
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Definition of Kaizen
A system of continuous improvement at every stage of production no matter how small the improvements might be
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Definition of Lead Times
Time take between the idea for a product and it being ready for sale
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Definition of Lean Suppliers
Suppliers of components and other materials should also operate a lean production system to ensure high quality and low prices
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Other cards in this set

Card 2

Front

(Current Assets - Stock) / Current Liabilities

Back

Acid Test Ratio Formula

Card 3

Front

(Operating Profit / Capital Employed)*100

Back

Preview of the back of card 3

Card 4

Front

[(Sales - Costs of Sales) / Sales Revenue]*100

Back

Preview of the back of card 4

Card 5

Front

Grow from shared values, attitudes, standards and beliefs that characterise an organisation and define it's nature

Back

Preview of the back of card 5
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