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Summary BTEC Business Unit 7 Business Decision Making notes
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- PEARSON (PEARSON)
BTEC Business Unit 7 Business Decision Making notes for exam
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Financial forecastingDo 2-3 in exam, spend 20-30 mins max
Creation and analysis of a sales forecast
- How to predict?
- Peaks and troughs
- Criteria to consider
- Sales data broken down by weeks
- Time at bottom, numbers at the side
Create and interpret a cash flow forecast
Cash flow is cash going in and cash going out
Considerations for cash in – costs,
Considerations for cash out – interests rates, considerations about paying wages, VAT, rent, cash
flow forecast
Creation and interpretation of a break-even chart
Break-even formula – break-even point = fixed costs/selling price – variable costs
Creation and interpretation of an income statement
One of the three main documents that are used to report financial performance
The three documents are income statement, balance sheet and cash flow forecast (breakeven)
It is a comprehensive statement of all income
Creation and interpretation of a statement of financial
position
A statement of financial position provides a snapshot at a given moment in time of a business’ assets
(what it owns or is owed) and its liabilities (debts) which can be used to assess its financial viability.
- Assets
- Liabilities
- Equity – equity is assets minus liabilities
Non-current assets (not particularly own it but take some time, cannot access immediately e.g.,
pension),
Current assets (what you can access now e.g., money in the bank, stock)
Current liabilities (things you have to pay off right now, e.g. overdrafts, bank loans, creditors)
Non-current liabilities (money you owe but not immediately e.g., mortgage,)
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