BTEC LEVEL 3 BUSINESS COMPREHENSIVE EXAM UPDATED
QUESTIONS AND SOLUTIONS RATED A+
✔✔Start up and running costs - ✔✔Financial resource:
Include:
- Buying equipment
- Deposit for renting premises
- Staff wages
- Monthly bills for utilities
✔✔Cash flow forecasting - ✔✔Enables a business to plan effectively for the incoming
and outgoing of funds, such as revenue from sakes and payments that they need to go
out on time.
✔✔Break even chart - ✔✔Is a visual representation which demonstrates at what point
the business is not making a profit or loss.
✔✔Fixed costs (breakeven chart) - ✔✔Straight line horizontal
✔✔Variable costs (breakeven chart) - ✔✔Starts at zero goes diagonal to the right
✔✔Total costs (breakeven chart) - ✔✔Line starts from the fixed costs line because fc +
vc = tc
✔✔Total revenue (breakeven chart) - ✔✔Starts at zero - is based on revenue of the
business depends how steep it'll be
✔✔Break even point (breakeven chart) - ✔✔Where the total costs and total revenue
cross is where the bep is
✔✔Income statement - ✔✔Every transaction a business makes must be accounted for.
The income statement will be used by businesses for many procedures, such as
checking viability, calculating when to pay invoices, ensuring employee wages can be
paid on time.
✔✔Ratio analysis - ✔✔Allows for a more meaningful interpretation of published
accounts by comparing one figure to another.
✔✔Liquidity ratio - ✔✔(Current Assets - Inventory) / Current Liabilities
✔✔Profitability ratio - ✔✔A profitability ratio measures the profitability of the business
✔✔Performance ratios - ✔✔Measure how well a business turns its assets into revenue
, ✔✔Fixed asset turnover calculation - ✔✔Revenue / value of property, plant and
equipment
✔✔sales revenue per employee calculation - ✔✔total sales revenue / total number of
employees
✔✔Contingency plan - ✔✔Provides an alternative solution or route to take based on the
outcomes from analysis such as PESTEL, SWOT and other tools
✔✔Vision led - ✔✔Clear image or procedures of how to deal with the situation
✔✔Plan led - ✔✔Criteria or objectives are defined based on analysis of methods
✔✔Consensus led - ✔✔Outcomes from discussions with other stakeholders
✔✔Legal (consideration of risk) - ✔✔No control over the legal factors which are
imposed on the business but they will impact on your decisions.
✔✔Reputation (consideration of risk) - ✔✔The importance of building and maintaining
the reputation of a business should not be underestimated.
✔✔Financial (consideration of risk) - ✔✔A business must be aware of government
intentions from the annual budget and reviews. The outcomes of these might include
changes to the tax law.
✔✔Gross profit - ✔✔Gross Profit is the amount of money left over (surplus) after the
cost of sales has been removed from total sales revenue. This is not the business' final
profit figure
✔✔Gross profit formula - ✔✔Sales revenue - cost of goods sold
✔✔Profit/Loss for Year formula - ✔✔Gross profit - expenses + other income
✔✔Income Statements - ✔✔An Income Statement shows a business' income and
outgoings over a shorter period of time.
✔✔Statements of Financial Position - ✔✔A statement of financial position offers a
snapshot of a business' financial situation, normally at the end of a financial year.
It is a summary of everything that the business owns (assets) and what it owes
(liabilities), giving the business' overall value.
✔✔Non-Current Assets - ✔✔A non-current asset is owned by the business and is an
asset that will remain within the business for longer than one year.
QUESTIONS AND SOLUTIONS RATED A+
✔✔Start up and running costs - ✔✔Financial resource:
Include:
- Buying equipment
- Deposit for renting premises
- Staff wages
- Monthly bills for utilities
✔✔Cash flow forecasting - ✔✔Enables a business to plan effectively for the incoming
and outgoing of funds, such as revenue from sakes and payments that they need to go
out on time.
✔✔Break even chart - ✔✔Is a visual representation which demonstrates at what point
the business is not making a profit or loss.
✔✔Fixed costs (breakeven chart) - ✔✔Straight line horizontal
✔✔Variable costs (breakeven chart) - ✔✔Starts at zero goes diagonal to the right
✔✔Total costs (breakeven chart) - ✔✔Line starts from the fixed costs line because fc +
vc = tc
✔✔Total revenue (breakeven chart) - ✔✔Starts at zero - is based on revenue of the
business depends how steep it'll be
✔✔Break even point (breakeven chart) - ✔✔Where the total costs and total revenue
cross is where the bep is
✔✔Income statement - ✔✔Every transaction a business makes must be accounted for.
The income statement will be used by businesses for many procedures, such as
checking viability, calculating when to pay invoices, ensuring employee wages can be
paid on time.
✔✔Ratio analysis - ✔✔Allows for a more meaningful interpretation of published
accounts by comparing one figure to another.
✔✔Liquidity ratio - ✔✔(Current Assets - Inventory) / Current Liabilities
✔✔Profitability ratio - ✔✔A profitability ratio measures the profitability of the business
✔✔Performance ratios - ✔✔Measure how well a business turns its assets into revenue
, ✔✔Fixed asset turnover calculation - ✔✔Revenue / value of property, plant and
equipment
✔✔sales revenue per employee calculation - ✔✔total sales revenue / total number of
employees
✔✔Contingency plan - ✔✔Provides an alternative solution or route to take based on the
outcomes from analysis such as PESTEL, SWOT and other tools
✔✔Vision led - ✔✔Clear image or procedures of how to deal with the situation
✔✔Plan led - ✔✔Criteria or objectives are defined based on analysis of methods
✔✔Consensus led - ✔✔Outcomes from discussions with other stakeholders
✔✔Legal (consideration of risk) - ✔✔No control over the legal factors which are
imposed on the business but they will impact on your decisions.
✔✔Reputation (consideration of risk) - ✔✔The importance of building and maintaining
the reputation of a business should not be underestimated.
✔✔Financial (consideration of risk) - ✔✔A business must be aware of government
intentions from the annual budget and reviews. The outcomes of these might include
changes to the tax law.
✔✔Gross profit - ✔✔Gross Profit is the amount of money left over (surplus) after the
cost of sales has been removed from total sales revenue. This is not the business' final
profit figure
✔✔Gross profit formula - ✔✔Sales revenue - cost of goods sold
✔✔Profit/Loss for Year formula - ✔✔Gross profit - expenses + other income
✔✔Income Statements - ✔✔An Income Statement shows a business' income and
outgoings over a shorter period of time.
✔✔Statements of Financial Position - ✔✔A statement of financial position offers a
snapshot of a business' financial situation, normally at the end of a financial year.
It is a summary of everything that the business owns (assets) and what it owes
(liabilities), giving the business' overall value.
✔✔Non-Current Assets - ✔✔A non-current asset is owned by the business and is an
asset that will remain within the business for longer than one year.
