Pearson A Level Business Theme 2

Explains what a statement of financial position (balance sheet) is, assets and liabilities, liquidity ratios (acid test and current ratios), and working capital

Describes a Statement of Comprehensive Income, profitability ratios (e.g. gross profit margin), how to improve profitability, and the difference between cashflow and profit

Describes the three types of budget (income, expenditure and profit), methods of setting a budget, variance analysis, and the advantages and disadvantages of budgets

Explains break-even analysis, the break-even formula, limitations of break-even, changes in break-even output and margin of safety.

Explains sales revenue, how to increase sales revenue, sales volume, sales forecasting, factors affecting sales forecasting, and the different types of costs (fixed, variable and total)

Describes what cash flow and cash flow forecasting is, how to calculate cash flow, the advantages and disadvantages of cash flow and why newly established businesses are vulnerable to cash flow problems

Describes the advantages and disadvantages of internal and external sources of finance and business plans, as well as explaining the difference between unlimited and limited liability

Explains the different types of legislation (e.g. consumer protection law, employee protection, environmental protection, etc.) and how it impacts the business.

Describes the economic environment, the business cycle, inflation, deflation, interest rates, exchange rates, the effect of economic uncertainty on the business environment, and the competitive environment

Describes quality management, quality control, quality assurance, total quality management (TQM) and Kaizen

Describes stock control diagrams (buffer stock, maximum stock level, re-order level, etc.), implications of poor stock control and Just-in-Time

Describes capacity utilisation, implications of under-utilisation of capacity (spare capacity), and ways of improving capacity utilisation.

Describes the different methods of production (e.g. batch or flow production), the advantages and disadvantages of each type of production, and how to chose the type of production. Also explains efficiency and productivity, and capital intensive and labour intensive production.