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EnglandBusiness

Finance and Accounting

6 dot points across 6 inquiry questions. Click any dot point for a focused answer with worked past exam questions where available.

Why can a profitable business run out of cash, and how do forecasts and budgets help?

The difference between cash and profit; the structure and use of a cash-flow forecast; the causes and solutions of cash-flow problems; working capital; budgets and budgetary control; and variance analysis.
A focused answer to the Eduqas A-Level Business statement on cash flow and budgets. Covers the difference between cash and profit, the cash-flow forecast, the causes and solutions of cash-flow problems, working capital, budgets and budgetary control, and variance analysis, with worked calculations.
13 min answer →

How do businesses classify costs and find the break-even point?

The classification of costs into fixed, variable and total; the calculation of revenue, contribution and profit; break-even analysis and the margin of safety; the construction and interpretation of break-even charts; and the value and limitations of break-even analysis.
A focused answer to the Eduqas A-Level Business statement on costs and break-even. Covers fixed, variable and total costs, revenue, contribution and profit, the break-even point and margin of safety, break-even charts, and the value and limitations of break-even analysis, with worked calculations.
13 min answer →

What financial objectives do businesses set, and how is financial performance judged?

Financial objectives such as profit, cash flow, return on investment and cost minimisation; the calculation of profit and profitability; the use of financial data to set targets and judge performance; and the link between financial objectives and corporate strategy.
A focused answer to the Eduqas A-Level Business statement on financial objectives and performance. Covers financial objectives (profit, cash flow, return on investment, cost minimisation), the calculation of profit and profitability, the use of financial data to set targets and judge performance, and the link to corporate strategy, with worked calculations.
12 min answer →

What do the financial statements show, and how do ratios judge performance?

The income statement and statement of financial position; profitability ratios (gross and net profit margin, ROCE); liquidity ratios (current ratio, acid test); gearing; the calculation and interpretation of ratios; and their value and limitations.
A focused answer to the Eduqas A-Level Business statement on financial statements and ratios. Covers the income statement and statement of financial position, profitability ratios (gross and net margin, ROCE), liquidity ratios (current and acid test), gearing, the calculation and interpretation of ratios, and their value and limitations, with worked calculations.
13 min answer →

How do businesses decide whether a long-term investment is worthwhile?

Investment appraisal methods: payback period, average rate of return and net present value; the calculation and interpretation of each; the use of discounting and the time value of money; and the strengths, limitations and qualitative factors in investment decisions.
A focused answer to the Eduqas A-Level Business statement on investment appraisal. Covers the payback period, the average rate of return and net present value, the calculation and interpretation of each, discounting and the time value of money, and the strengths, limitations and qualitative factors in investment decisions, with worked calculations.
14 min answer →

Where do businesses get their money, and how do they choose the right source?

Internal and external sources of finance; short-term and long-term finance; the distinction between capital and revenue expenditure; factors affecting the choice of finance; and the appropriateness of each source for a start-up versus an established firm.
A focused answer to the Eduqas A-Level Business statement on sources of finance. Covers internal and external sources, short-term and long-term finance, capital versus revenue expenditure, the factors affecting the choice of finance, and the appropriateness of each source for start-ups and established firms.
12 min answer →