Promotion
To inform someone about a product with the intention to get them to take action to purchase it
What kind of information will be found on an invoice?
Amount you have to pay
How you pay for something
How many days you have to pay for something
What is the difference between a fixed and variable cost?
Fixed costs stay the same- i.e. rent
Variable costs change- i.e. stock
Define breakeven
Breakeven when revenue covers costs
Give two examples of a fixed asset for a business
Van
Car
Factory
An example of sales promotion is.....
Discounts
Coupons
Loyalty cards
Who sends the delivery note- the customer or supplier?
Supplier
Define the term profit
Money made after costs have been taken from revenue
Fixed costs
Revenue/ sales
Total costs
(maybe) variable costs
Is a creditor an asset or a liability?
Liability
What is B2B and B2C
Business to business
Business to Consumer
What is the document you receive after you have paid the invoice?
Receipt
Give an example of a start up and running (operating) cost
Start up- one off such as tables/ computer
Running- pay monthly- stock/ rent
If a business BEP is 1200 and its actual output is 2300. What is the margin of safety?
1100
Explain what a statement of comprehensive income shows a business
If profit or loss has been made
When might a business choose to use personal selling?
Expensive product
Tech product
Complicated product
What is the order of financial documents?
Purchase order
Delivery note
Invoice
Receipt/ credit note
Statement of Account
What is the difference between net profit and gross profit?
Gross profit is profit made from sales after cost of sales have been deducted.
Net profit takes into account all costs being taken from revenue
What is the calculation for break even?
Fixed costs / selling price- variable costs
If net current assets for the business are £20,000. What does this tell you about the business?
This tells you the business has £20,000 of cash or stock that can be used right now to start buying/ paying for things?
The 4 ways to segmenting a market are....
Geographic
Demographic
Psychographic
Behavioural
What are the drawbacks to a business if you do need keep track of financial records
Might get into debt?
Might not be gathering the correct amount of money from customers?
Might get in trouble if audited
Not able to chase up incorrect payments
What changes could a business make if their gross profit was high but their new profit was very low?
Lower expenses such find new supplier for electricity or find a new premises to rent.
What are two benefits of calculating breakeven point
The business knows how many they need to sell so can set targets to achieve this
Can see if the business is likely to make a loss and from that take action to avoid this like lower costs
This tells us they have double the assets to pay of their liabilities.