BTEC (Business and Technology Education Council) BTEC Business Flashcards

24 sample cards from the BTEC Business deck

Sampled from the end of the deck, so these are different cards from the ones shown on the syllabus page.

1. State the break-even output formula.

   $$\text{Break-even (units)} = \frac{\text{Fixed Costs}}{\text{Selling Price per unit} - \text{Variable Cost per unit}}$$

2. What is the contribution per unit and how is it calculated?

   Contribution per unit is the amount each unit sold contributes towards fixed costs and profit. $$\text{Contribution per unit} = \text{Selling Price per unit} - \text{Variable Cost per unit}$$

3. What is the margin of safety in break-even analysis?

   The margin of safety is the difference between actual (or budgeted) sales and the break-even level of sales. $$\text{Margin of Safety} = \text{Actual Sales} - \text{Break-even Sales}$$ It shows how far sales can fall before a loss is made.

4. A firm has fixed costs of £8{,}000, a selling price of £20 and variable cost of £12 per unit. Calculate the break-even output.

   $$\frac{8000}{20 - 12} = \frac{8000}{8} = 1000 \text{ units}$$

5. What is a cash flow forecast?

   A cash flow forecast is a prediction of the money flowing into (inflows/receipts) and out of (outflows/payments) a business over a future period, used to identify potential cash shortages.

6. Define net cash flow, opening balance and closing balance.

   Net cash flow = total inflows − total outflows for a period. Closing balance = opening balance + net cash flow. The closing balance becomes the next period's opening balance.

7. Why is positive cash flow important even for a profitable business?

   A business can be profitable but still fail if it runs out of cash (illiquidity) and cannot pay wages, suppliers or bills on time. Cash flow ensures day-to-day solvency.

8. What is the purpose of a statement of comprehensive income (income statement / profit and loss account)?

   It shows a business's revenue, costs and the resulting gross and net profit (or loss) over a period of time, indicating financial performance.

9. Give the formulas for gross profit and net profit.

   $$\text{Gross Profit} = \text{Revenue} - \text{Cost of Sales}$$ $$\text{Net Profit} = \text{Gross Profit} - \text{Expenses (overheads)}$$

10. What does a statement of financial position (balance sheet) show?

    It shows the assets, liabilities and capital (equity) of a business at a single point in time, summarising what the business owns and owes. Assets = Liabilities + Capital.

11. Distinguish between current assets and non-current (fixed) assets.

    Current assets are short-term and easily converted to cash within a year (e.g. stock, debtors, cash). Non-current/fixed assets are held long-term for use in the business (e.g. machinery, premises, vehicles).

12. List the main stages of the recruitment process in order.

    Identify a vacancy, conduct a job analysis, write a job description and person specification, advertise the vacancy, receive applications, shortlist candidates, select (interview/test), and make the appointment.

13. Distinguish between a job description and a person specification.

    A job description outlines the duties, responsibilities and tasks of the role. A person specification describes the skills, qualifications, experience and qualities the ideal candidate should have.

14. Distinguish between internal and external recruitment, giving one advantage of each.

    Internal recruitment fills a post from existing staff (advantage: cheaper, faster, candidate is known). External recruitment hires from outside (advantage: brings new skills and fresh ideas).

15. Name four common selection methods used by employers.

    Interviews, aptitude/skills tests, psychometric tests, assessment centres, presentations, group exercises, and reviewing references.

16. What is the difference between transferable skills and job-specific skills?

    Transferable skills (e.g. communication, teamwork, problem-solving) can be used across many jobs and industries. Job-specific skills are particular to a role or sector (e.g. operating a specific machine).

17. What is meant by employability skills? Give three examples.

    Employability skills are the personal attributes and abilities that make someone effective in work. Examples: communication, teamwork, time management, reliability, problem-solving, and a positive attitude.

18. Distinguish between financial and non-financial methods of motivating staff.

    Financial methods use money to motivate (e.g. pay rises, bonuses, commission, profit sharing). Non-financial methods use other rewards (e.g. praise, promotion, job enrichment, training, good working conditions).

19. Why is staff retention important and name two ways to improve it.

    High retention reduces recruitment and training costs and keeps experienced staff. It can be improved through competitive pay, training and development, recognition, career progression, and good working conditions.

20. What does the PESTLE analysis acronym stand for?

    Political, Economic, Social, Technological, Legal and Environmental factors — the external influences on a business.

21. In PESTLE, give one example each of an Economic and a Legal factor affecting a business.

    Economic: interest rates, inflation, unemployment or exchange rates. Legal: employment law, consumer protection law, health and safety regulations, or minimum wage.

22. What is a stakeholder? Name four examples.

    A stakeholder is any individual or group with an interest in, or affected by, a business. Examples: owners/shareholders, employees, customers, suppliers, the local community, government, and creditors.

23. What is meant by market structures, and how do monopoly and perfect competition differ?

    Market structure describes the level of competition in a market. A monopoly has one dominant firm with high prices and little competition; perfect competition has many small firms selling identical products with no single firm influencing price.

24. Distinguish between business ethics and sustainability.

    Business ethics concerns doing what is morally right (e.g. fair pay, honest marketing, no exploitation). Sustainability concerns meeting present needs without harming the ability of future generations to meet theirs (e.g. reducing waste, using renewable resources).

What this deck covers

BTEC Business flashcards FAQ