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WorksheetsBusiness Year 12.
Total questions: 22
Worksheet time: 22mins
A corporate objective of survival is most likely to be set by:
A long-established and profitable family business
A profitable multinational company
A high-profile start-up financed by substantial venture capital
An established business now experiencing growing losses
What is the market capitalisation of a company with a share price of £1.75, dividends of 10p per share and 10 million shares in issue?
£175 million
£10 million
£1 million
£17.5 million
The external environment concerns features of the business environment that are:
Within the control of a business
Outside the control of a business
Opportunities for a business
Threats for a business
The following are all commonly used as corporate objectives EXCEPT which one?
Return on investment
Inventory turnover
Market share
Market capitalisation
The level of consumer demand in general is likely to be most directly affected by changes in:
Wages and income tax
Liverpool FC winning the leauge
Technological and social change
Interest rates and exchange rates
The term that describes the overall purpose of Harvey's business is:
Mission
Money
More Money
Objectives
Not-for-profit organisations are also commonly referred to as:
PLC
Public companies
Social enterprises
Public sector
Which of these statements about public limited companies (“PLC”) is true?
A PLC doesn't have to offer its shares on a stock exchange
Shareholders in a PLC do not have limited liability
The general public may invest in any PLC if they wish to
A PLC must have a minimum share capital of £1million
Which of these functional objectives would be consistent with a corporate objective to reduce costs?
Increase average selling prices by 15%
Increase unit costs by 10%
Increase labour productivity by 20%
Increase marketing budgets by 10%
What name is given to where a company lists its shares on a public stock exchange for the first time?
Rights issue
Independent public offering
Flotation
New share listing
An advantage of setting up as an incorporated rather than unincorporated business is that the business:
Will have unlimited liability
Will be able to obtain bank finance
Remains in existence after a change in ownership
Will be better at making decisions
The two most important indicators of market conditions are:
Economic growth & market demand
Inflation & unemployment
Disposable income & exchange rates
Share prices & interest rates
For an office-based professional services business, leasing would be the most appropriate way to finance the purchase of:
Inventories
Company cars
Land and buildings
Advertising campaigns
Ben & Harry want to reduce the quantity or value of inventories held by their business. This would normally:
Increase space in stock room
Increase operating profit
Sales will go up
Improve cash flow
Which of these formulae defines the point at which breakeven output is achieved?
Total Costs = Total Contribution
Total Revenue = Total Price
Total Profit = Total Costs
Total Revenue = Total Costs
Short-term cash flow can be improved by:
Increasing the value of finished goods inventories
Extending the period of credit taken from suppliers
Cutting the gross profit margin
Buying less oil.
Which of these businesses is most likely to have financial objectives focused on breakeven and survival?
Multinational looking to expand into emerging markets
Established quoted company
Private equity-backed software firm in Silicon Valley
Entrepreneur starting her first business
What are fixed costs if a business makes a profit for the year of £400,000 after turnover of £850,000 and variable costs of £225,000?
£225,000
£355.000
£2250.00
£25525.00
Breakeven output can be calculated by dividing total fixed costs by:
Total variable costs
Variable cost per unit sold
Selling price per unit sold
Contribution per unit sold
What is meant by "sale and leaseback"?
Selling a fixed asset and then leasing it from the new owner
Buying a fixed asset and leasing it to the supplier
Buying stocks and then leasing them to a wholesaler
Selling stocks and then leasing them from a distributor
An advantage of using debt finance to help a business grow is that:
Interest costs will be low
There is no loss of shareholder control
Debt does not need to be repaid until the business can afford to
The business will grow faster using debt rather than equity finance
Which one of these events might lead to a cash flow problem for Varun's & Alex's business?
Major supplier expands into China
Cost savings achieved on a large contract
Important customer goes into administration
Key suppliers extend payment terms
