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Theory and Key Terms Covered as of 30th November 2010Guidance on Revision: Little and often is the key. Revision can be boring and you can find yourself being distracted. You should never plan to revise for more than one hour at a time and you should make sure that you are DOING something active to revise. The best way to revise is to: 1. Summarise notes 2. Review and test yourself on key terms 3. Plan associated past paper questions 4. Write full answers to past paper questions 5. Review your responses against the mark scheme / your previous response done in class 6. Teacher somebody else the theory you have learnt How you should use this key terms summary: y Look at the details from the specification y Organise your notes in your folder to ensure you have materials which cover all of the sections y If you have gaps, look if there are support materials on the P drive or the blog (http://a2businessblog.blogspot.com/ ) y Summarise key themes for each section y Ensure your summaries include definitions of the key terms y The revise as per the guidance above DO NOT just learn the key terms. Details from the specification tell you what you should be able to do with this knowledge. I am available to help you, but you must try to solve your own problems first. You must also ask me specific questions, which dem onstrate you have tried to help yourself. Exam Dates: BS3 - Friday 10th June 2011 BS4 - Monday 20th June 201 1

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BS3 Business Analysis Details from the Specification Profit and loss accounts and balance sheets of limited companies. Associated Key Terms 1. Sales revenue 2. Variable costs 3. Gross profit 4. Fixed costs 5. Operating profit 6. Non-operating income 7. Finance income 8. Finance cost 9. Profit before tax 10. Corporation tax 11. Profit after tax 12. Dividends 13. Retained profit 14. Fixed assets 15. Current assets 16. Current liabilities 17. Net current assets / working capital 18. Net assets 19. Long term liabilities 20. Share capital 21. Reserves / Retained profit 22. Capital employed 23. Gross profit margin 24. Net profit margin 25. Return on capital employed (ROCE) 26. Current ratio 27. Acid test ratio

Profitability ratios: the calculation, interpretation and importance of these ratios. Liquidity ratios: the calculation, interpretation and importance of these ratios. The distinction between profitability and liquidity and their relative importance. Gearing ratio: the calculation, interpretation and importance of this ratio. Limitations of ratio analysis and the importance of inter-business and historical comparisons. Window dressing the ability of firms to make decisions which affect their apparent performance in their published accounts.

28. Gearing ratio

29. Quantitative data 30. Qualitative data 31. Window dressing 32. Methods of window dressing

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Details from the Specification Non-financial methods of judging business performance.

Associated Key Terms 33. Market share 34. Sales targets 35. Productivity 36. Environmental impact 37. Quality 38. Customer satisfaction.

BS4 Finance and Accounting Details from the Specification Budgetary control: preparing budgets, reviewing performance against budgets. Budgets as an aid to decision making. Associated Key Terms 39. Budget 40. Expenditure budget 41. Income budget 42. Capital budget 43. Profit budget 44. Variance 45. Favourable variance 46. Adverse variance 47. Sources of information for budget setting 48. Zero-budgeting 49. Absorption costing 50. Methods of apportioning direct costs 51. Contribution costing 52. Standard costing 53. Special orders 54. Cost centre 55. Profit centre 56. Methods used to divide up the busines s into cost or profit centres 57. Net cash inflows from an investment 58. Payback period 59. Average rate of return 60. Net present value 61. Discount factor 62. Qualitative factors influencing investment decisions 63. Impact on workforce redundancies / retraining 64. Impact on customer service 65. Competitive advantage 66. Environmental impact

Costing methods

Cost and profit centres: nature and purpose of cost and profit centres. Impact on accountability and use for benchmarking.

Investment appraisal: quantitative and qualitative factors effecting business decisions.

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Details from the Specification Depreciation: its relevance and calculation.

Associated Key Terms 67. Depreciation 68. Historic cost 69. Residual value 70. Resale value 71. Straight line method of depreciation 72. Purpose of depreciation

BS4 Operations Management Details from the Specification Decision trees: purpose, construction, interpretation, benefits and limitations. Associated Key Terms 73. Decision point 74. Chance node 75. Probability 76. Predicted profit or loss 77. Network diagram 78. Node number 79. Earliest start time 80. Latest finish time 81. Identifying the critical path 82. Total float 83. Free float 84. Private costs 85. Private benefits 86. External costs 87. External benefits 88. Intangible factors 89. Value judgement

Critical path analysis: purpose, construction of networks, interpretation, benefits and limitations.

Cost benefit analysis: strengths and weaknesses of CBA in practice.

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Details from the Specification Waste management: methods, costs, benefits, problems and ethical issues.

Associated Key Terms 90. Social costs 91. Social benefits 92. Pollution 93. Congestion 94. Noise 95. Destruction of the environment 96. Waste disposal 97. Government regulation 98. Taxation 99. Subsidies 100. Pollution permits 101. Consumer pressure 102. Environmental audit 103. Conservation 104. Private costs of being more environmentally friendly as a business 105. Private benefits of being more environmentally friendly as a business 106. 107. Outsourcing Off-shoring

Out-sourcing: nature, benefits and problems.

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