BUSINESS STUDIES

Labour productivity

Total output / Number of workers

Capital productivity

Total output/ capital employed

Flexitime

Where people can work a set amount of hours a month/week but can change start and end time

CAD

use of computers to 3D design products thus removing need to build models

CNC’s

Machines that carry out instructions fed by computers

CAM

Where computers link & control design + manufacturing of goods ( reduces waste as uses exact amount of material + less energy in transportation)

CIM

Use of computers to control the entire production process ( eg planning, stock control) thus people only being used for supervising

Working/circulating capital:

Resources used up in production

Fixed capital

Man made resources

Opening balance

Closing balance of previous

Closing balance

Opening balance + net can flow

Profit

Total revenue - total costs

Total variable costs

Variable costs per unit x quantity

Average costs

Total costs / quantity produced (output)

Break even point

Fixed costs / selling price - variable costs per unit

Contribution per unit

Selling price - variable costs per unit

Margin of safety

Actual output - breakeven output

Net current assets

Current assets - current liabilities

Net assets

All assets - all liabilities

Price

Cost + (cost x markup)

Current ratio:

Businesses liquidity

1.5-2 = ✅

Below = low working capital

Above 2 = unproductive money handling

How to improve liquidity ratios

Increase time takes to pay creditor

Ask debtors to pay quicker