BS3 &amp BS4 Finance and Ops MGMT

Name - 08 December 2021
Theory and Key Terms Covered as of 30th November 2010

Guidance on Revision:
Little and often is the key. Revision can be boring and you can find yourself being distracted. You
should never plan to revise for more than one hour at a time and you should make sure that you
are DOING something active to revise.
The best way to revise is to:

1. Summarise notes
2. Review and test yourself on key terms
3. Plan associated past paper questions
4. Write full answers to past paper questions
5. Review your responses against the mark scheme / your previous response done in class
6. Teacher somebody else the theory you have learnt
How you should use this key terms summary:

 Look at the details from the specification
 Organise your notes in your folder to ensure you have materials which cover all of the
sections
 If you have gaps, look if there are support materials on the P drive or the blog
(http://a2businessblog.blogspot.com/)
 Summarise key themes for each section
 Ensure your summaries include definitions of the key terms
 The revise as per the guidance above
DO NOT just learn the key terms. Details from the specification tell you what you should be able to
do with this knowledge.
I am available to help you, but you must try to solve your own problems first. You must also ask me
specific questions, which demonstrate you have tried to help yourself.
Exam Dates:
BS3 - Friday 10th June 2011
BS4 - Monday 20th June 2011
Miss. Nation Page - 1

BS3 – Business Analysis
Details from the Specification Associated Key Terms

Profit and loss accounts and balance sheets of 1. Sales revenue
limited companies. 2. Variable costs
3. Gross profit
4. Fixed costs
5. Operating profit
6. Non-operating income
7. Finance income
8. Finance cost
9. Profit before tax
10. Corporation tax
11. Profit after tax
12. Dividends
13. Retained profit
14. Fixed assets
15. Current assets
16. Current liabilities
17. Net current assets / working capital
18. Net assets
19. Long term liabilities
20. Share capital
21. Reserves / Retained profit
22. Capital employed
Profitability ratios: the calculation, 23. Gross profit margin

interpretation and importance of these ratios. 24. Net profit margin
25. Return on capital employed (ROCE)
Liquidity ratios: the calculation, interpretation 26. Current ratio
and importance of these ratios. 27. Acid test ratio
The distinction between profitability and

liquidity and their relative importance.
Gearing ratio: the calculation, interpretation and 28. Gearing ratio

importance of this ratio.
Limitations of ratio analysis and the importance 29. Quantitative data

of inter-business and historical comparisons. 30. Qualitative data
Window dressing – the ability of firms to make 31. Window dressing

decisions which affect their apparent 32. Methods of window dressing
performance in their published accounts.


Non-financial methods of judging business 33. Market share
performance. 34. Sales targets
35. Productivity
36. Environmental impact
37. Quality
38. Customer satisfaction.
BS4 – Finance and Accounting

Budgetary control: preparing budgets, reviewing 39. Budget
performance against budgets. Budgets as an aid 40. Expenditure budget
to decision making. 41. Income budget
42. Capital budget
43. Profit budget
44. Variance
45. Favourable variance
46. Adverse variance
47. Sources of information for budget setting
48. Zero-budgeting
Costing methods 49. Absorption costing

50. Methods of apportioning direct costs
51. Contribution costing
52. Standard costing
53. Special orders
Cost and profit centres: nature and purpose of 54. Cost centre
cost and profit centres. Impact on 55. Profit centre
accountability and use for benchmarking. 56. Methods used to divide up the business into
cost or profit centres
Investment appraisal: quantitative and 57. Net cash inflows from an investment
qualitative factors effecting business decisions. 58. Payback period
59. Average rate of return
60. Net present value
61. Discount factor
62. Qualitative factors influencing investment
decisions
63. Impact on workforce – redundancies /
retraining
64. Impact on customer service
65. Competitive advantage
66. Environmental impact


Depreciation: its relevance and calculation. 67. Depreciation
68. Historic cost
69. Residual value
70. Resale value
71. Straight line method of depreciation
72. Purpose of depreciation
BS4 – Operations Management

Decision trees: purpose, construction, 73. Decision point
interpretation, benefits and limitations. 74. Chance node
75. Probability
76. Predicted profit or loss
Critical path analysis: purpose, construction of 77. Network diagram

networks, interpretation, benefits and 78. Node number
limitations. 79. Earliest start time
80. Latest finish time
81. Identifying the critical path
82. Total float
83. Free float
Cost benefit analysis: strengths and weaknesses 84. Private costs

of CBA in practice. 85. Private benefits
86. External costs
87. External benefits
88. Intangible factors
89. Value judgement


Waste management: methods, costs, benefits, 90. Social costs
problems and ethical issues. 91. Social benefits
92. Pollution
93. Congestion
94. Noise
95. Destruction of the environment
96. Waste disposal
97. Government regulation
98. Taxation
99. Subsidies
100. Pollution permits
101. Consumer pressure
102. Environmental audit
103. Conservation
104. Private costs of being more
environmentally friendly as a business
105. Private benefits of being more
environmentally friendly as a business
Out-sourcing: nature, benefits and problems. 106. Outsourcing

107. Off-shoring

BS3 &amp BS4 Finance and Ops MGMT

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Name - 08 December 2021

Theory and Key Terms Covered as of 30th November 2010

The best way to revise is to:

How you should use this key terms summary:

Miss. Nation Page - 1

BS3 – Business Analysis

Details from the Specification Associated Key Terms

Profitability ratios: the calculation, 23. Gross profit margin

The distinction between profitability and

Gearing ratio: the calculation, interpretation and 28. Gearing ratio

Limitations of ratio analysis and the importance 29. Quantitative data

Window dressing – the ability of firms to make 31. Window dressing

Miss. Nation Page - 2

Details from the Specification Associated Key Terms

BS4 – Finance and Accounting

Details from the Specification Associated Key Terms

Costing methods 49. Absorption costing

Miss. Nation Page - 3

Details from the Specification Associated Key Terms

BS4 – Operations Management

Details from the Specification Associated Key Terms

Critical path analysis: purpose, construction of 77. Network diagram

Cost benefit analysis: strengths and weaknesses 84. Private costs

Miss. Nation Page - 4

Details from the Specification Associated Key Terms

Out-sourcing: nature, benefits and problems. 106. Outsourcing

Miss. Nation Page - 5

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