Random Topics

Question 1

Break-Even

Answer 1

The point at which a business is not making a profit or loss. The money received from sales is the same as the money being spent on costs

Question 2

Ad of Break-even

Answer 2

• Planning- helps the business to work out how many items it needs to sell over a certain period to cover its costs and to use this information to set a price that will enable it to make a profit
• Monitoring- break-event alerts the business to potential problems, e.g increased fixed or variable costs or a fall in sales, allowing it to take steps to fix them in good time

Question 3

Dis of Break-even

Answer 3

• Not a predictor of demand- Its important to note that a break-even analysis is not a predictor of demand. It won’t tell you what your sales are going to be, or how many people will want what you’re selling
• It takes time to prepare and workout, the time could be spent doing other tasks in the business
• The accuracy of your break even point depends on accurate data. If you don’t feed good data into the formula you won’t get a reliable result

Question 4

Independent Financial Advisor

Answer 4

Professional individuals who give independent advice and guidance on a range of financial products, such as mortgages, pensions, and investments

Question 5

Ad of Independent Financial Advisor

Answer 5

• They do not receive a commission from any of the financial products they recommend
• Services offered are regulated by the FCA and FOM
• Advice is given by professionals in the fleid

Question 6

Dis of Independent Financial Advisor

Answer 6

• Consumers pay a fee for the advice

- Advice offered is not guaranteed to be 100% up to date or unbiased

Question 7

Leasing

Answer 7

Paying to use an asset in installments however the ownership of the asset remains with the supplier throughout the lease agreement

Question 8

Ad of Leasing

Answer 8

• Responsibility for maintaining and repairing the asset stays with the supplier
• Spreads the cost of an assets over its useful life to avoid paying a lump sum upfront

Question 9

Dis of Leasing

Answer 9

• Late payments- the asset can be repossessed
• The business never owns the asset and therefore payments are ongoing
• Interest- The overall amount paid for the asset will be higher than if purchased outright

Question 10

Ad of Cash Flow forecast

Answer 10

• Encourages planning for cash inflows and cash outflows- not overspending
• Enables cash flow to be monitored and intervention to happen when necessary- wont get into debt

Question 11

Dis of Cash Flow forecast

Answer 11

• Based on forecasts and therefore may be inaccurate
• Cannot plan for unexpected events e.g sudden rise in cost of raw materials
• Time-consuming to produce accurately