Directive words
Sketch in general terms
What is outline?
Main strategic goal for businesses
What is profit maximisation?
What is the sales approach?
A businesses ability to pay for Current Liabilities with current assets.
What is liquidity?
1:1 or 100%
What is the ideal debt to equity ratio?
Provide features and characterisitcs
What is describe?
How a business gains a competitive advantage with their products
What is product differentiation?
The main group of customers that a businesses focuses on.
What is the target market?
The place where a shareholder can buy and sell shares in a public company.
What is the Australian Securities Exchange?
Current Assets: $200, 000
Current Liabilities: $100 000
What is the current ratio?
2:1
Show cause and effect or show relationship between
What is explain
People that buy goods and services.
What is a customer?
Place, Promotion, Product, Price, Physical evidence, Processes and People
What are the seven Ps?
What is debt financing?
Sales. $150 000
Gross Profit: $75 000
What is Cost of Goods Sold?
$75 000
Show relationship between and draw out implications
What is analyse?
The objectives that a business wants to achieve in the long term
What are strategic goals?
The piece of legislation that protects the rights and responsibilities of consumers.
What is the Competition and Consumer Act 2010?
The profit that the business reinvests back into the business.
What is Retained Profit?
Current Liabilities: 35 000
Current Assets: 45 000
Non Current Liabilities: 250 000
Owners Equity. 150 000
What is the debt to equity ratio?
1.9:1 or 190%
Make a judgement based on criteria
What is evaluate?
The goals that a business wants to achieve in the short term.
What are tactical objectives?
When a business prices their product at below cost price.
What is a loss leader?
When a business sells their accounts receivable to a debt collection agency.
What is factoring?
Accounts Receivable: $45 000
Sales: $125 000
What is the accounts receivable turnover in days?
131 days
State reasons for
What is account for?
The document that outlines all of the business's future plans and the strategies that they are going to use to achieve them.
What is a business plan?
When a business only sells their product in one place.
What is exclusive distribution?
A financial tool that a business uses to raise funds by issuing these on the Australian Securities Exchange and the owner of these does not become an owner of the business.
What is a debenture?
Sales $350 000
COGS: $65 000
Net Profit: $55 000
Work out the Gross Profit Ratio and the Expense Ratio
Gross Profit Ratio: 81.4%
Expense Ratio: 65.7%