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Northern IrelandBusiness Studies

Unit 2 Finance

4 dot points across 4 inquiry questions. Click any dot point for a focused answer with worked past exam questions where available.

How many units must a business sell to cover its costs, and how is that worked out?

Break-even: fixed, variable and total costs, contribution per unit, calculating break-even output, the margin of safety, and interpreting a break-even chart.
A CCEA GCSE Business Studies guide to break-even. Covers fixed, variable and total costs, contribution per unit, the break-even formula, the margin of safety, how to read a break-even chart, and how to interpret what the figures mean for a business.
14 min answer →

How does a business predict its cash, and why can a profitable firm still run out of money?

Cash flow forecasting: the meaning of cash flow, completing and interpreting a cash flow forecast including net cash flow and the opening and closing balances, and the difference between cash and profit.
A CCEA GCSE Business Studies guide to cash flow forecasting. Covers what cash flow means, how to complete and interpret a cash flow forecast including net cash flow and the opening and closing balances, the difference between cash and profit, and how a business solves a cash-flow problem.
14 min answer →

How do financial statements and ratios show whether a business is doing well?

Financial statements and ratios: the statement of comprehensive income and the statement of financial position, and calculating and interpreting the gross profit margin and net profit margin.
A CCEA GCSE Business Studies guide to financial statements and ratios. Covers the statement of comprehensive income (profit and loss) and the statement of financial position (balance sheet), gross profit and net profit, and calculating and interpreting the gross profit margin and net profit margin.
14 min answer →

Where do businesses get the money they need, and which source suits which purpose?

Sources of finance: internal and external sources, short-term and long-term finance, and how a business chooses a source that suits its need, cost and circumstances.
A CCEA GCSE Business Studies guide to sources of finance. Covers internal and external sources, short-term and long-term finance such as overdrafts, trade credit, bank loans, share capital, retained profit and grants, and how a business chooses the source that suits its need, cost and circumstances.
13 min answer →