Edexcel Business A Level Revision

Interest Rates - is the price of borrowed money. Getting a loan will mean repaying with interest. If you borrow £10,000 at an interest rate if 5%, the repayment will, by the end of the year, be £10,000 + £500 (5%) i.e. £10,500. Interest rates vary depending on the level of risk involved in the loan. At any one time there are a variety of different interest rates operating within the external environment; for example: Interest rates on savings in bank and other accounts Borrowing interest rates Mortgage interest rates (housing loans) Credit card interest rates and pay day loans Interest rates on government and corporate bonds   Interest rates increase… Interest rates decrease… ·        Businesses are less likely to borrow money expand ·          Investment may increase; existing businesses may expand ·        ...

Sales forecast - is an estimation of future sales that may be based on previous sales figures, sales volumes, trends, market surveys and trends or managerial estimates. The purpose of this for the following categories are: Finance Inform cash-flow forecasts i.e. how much money can the business expect to flow in from sales.(sales will directly affect cash inflow and so any change in future sales will alter the cash flow and so any change in future sales will alter the cash flow forecast and the level and availability of working capital) Predict sales volume and sales revenue Assess ability to break-even Help set budgets (if sales are forecasted to increase, the business will need to increase departmental budgets for production and distribution) Profit and Loss forecast (future sales will have a direct bearing on this) People Plan workforce needs for: Sales team Seasonal staff in stores or distribution Peak times Operatives to ensure supply meets demand (the...