This presentation looks at the topic of break even and focuses on what is the concept of break even? It also goes on to cover the formula that can be used to calculate break even and how to complete the break even chart. There are questions included in this presentation which get progressively more complex.

 

BTEC First Award Business

Unit 2 Finance for Business

Below you can find a collection of resources that should help you with your knowledge and understanding of the Finance for Business unit of your BTEC studies.

This unit will be examined so you need to ensure that you are ready and prepared for you exam and good performance in this exam is critical to achieving your highest possible grade in your Business Studies course.

Learning Aims;

  • A Understand the costs involved in business and how businesses make a profit
  • B Understand how businesses plan for success
  • C Understand how businesses measure success and identify areas for improvement

Topic

Content

BeeBusinessBee Resource

Assessment Questions

A.1 Understand the costs involved in business

Learners should:

● understand and identify costs of a business, including:

o start-up costs – the costs incurred when setting up a business

o operating (running) costs – the costs incurred in the day-to-day running of a

business

● understand, define and identify the differences between fixed and variable costs,

direct and indirect costs, total costs

● calculate total costs (formula will not be given in the assessment)

 BeeBusinessBee Business Costs Tutorial (YouTube Video Resource)

Introduction to Finance Lesson 1 Presentation

Business Costs Lesson 2 Presentation

Direct and Indirect Costs

 Business Costs, Revenue and Profit End of Topic Test

BeeBusinessBee Student Self Assessment Topic Tracker

Direct and Indirect Costs Quiz

Common Questions Regarding your Exam

BTEC Business Unit 2 Key Words Pairs Matching Game

A.2 Understand how businesses make a profit

Learners should:

● understand and identify how businesses make money (generate revenue) – from

selling their products or services

● identify sources of revenue for a business

● calculate revenue (formula will not be given in the assessment)

● describe how businesses have to spend money (expenditure) in order to succeed

● identify types of expenditure (including overheads) businesses may have

● understand that expenditure is anything a business pays out and overheads are the

everyday running costs of a business

● understand that businesses must know how much money is coming in (revenue) and

going out (expenditure), before they can work out whether the business has:

o made a profit

o made a loss

● define:

o profit – revenue is more than expenditure

o loss – expenditure is more than revenue

● calculate profit (formula will not be given in the assessment)

 BeeBusinessBee Business Revenue, Expenditureand Profit Tutorial (YouTube Video Resource)

Types of Revenue, Expenditure and Calculating Lesson 3 Presentation

Revenue, Costs and Profit BeeBusinessBee Student Worksheet

 

 BeeBusinessBee Student Self Assessment Topic Tracker

Revenue, Costs and Profit Student Quiz

Business Star Finance Quiz

Business Star Finance Quiz 2

B.1 Understand the planning tools businesses use to predict when they

will start making a profit

Learners should:

● define breakeven – when a business has made enough money through product sales

to cover the cost of making the product (no profit and no loss)

● be able to interpret from a break-even chart:

o break-even point

o profit

o loss

o variable costs

o fixed costs

o total revenue

o total costs

o margin of safety

● calculate the breakeven (formula will be given in the assessment)

● analyse and explain the value and importance of breakeven analysis to businesses

when planning for success

● analyse and explain the associated risks to businesses of not completing a breakeven

analysis

● present given information graphically on a break-even chart

● analyse the effect on the break-even point if sales or (fixed and variable) costs

change, and explain the impact of these changes on the business

 BeeBusinessBee Break Even Tutorial (YouTube Video Resource)

Introduction to Break Even, Formula and Chart

Break Even Student Activity Presentation

Break Even Student Revision Booklet

Break Even Lesson 3

 BeeBusinessBee Student Self Assessment Topic Tracker

Break Even Student Quiz 

B.2 Understand the tools businesses use to plan for success

Budgeting – learners should understand:

● the purpose of budgeting in setting expenditure and revenue budgets

● the difference between budgeting and budgetary control (checking performance

against plan)

Cash flow forecasting – learners should:

● know the purpose of a cash flow forecast – to identify the money that should be

coming into a business (inflows) and the money going out of the business (outflows)

over a period of time

● be able to identify inflows and outflows

● explain the purpose of a cash flow forecast, including that it identifies the flow of

cash through a business over a period of time

● understand the sources of cash coming into the business (inflows)

● understand the sources and destination of cash leaving the business (outflows)

● identify the impact of timings of inflows and outflows

understand the benefits of using a cash flow forecast to plan for success in a business

(e.g. to produce new goods/services, invest in new resources, expand/reduce

activities) and explain the associated risks to businesses of not completing a cash

flow forecast

● complete a cash flow forecast from given information, showing individual and total

inflows, individual and total outflows, net inflows and outflows, and opening and

closing balances

● analyse a business’ finances based on cash flow information and identify possible

issues for the business from any cash surplus or deficit

 BeeBusinessBee Budgeting Tutorial (YouTube Video Resource)

BeeBusinessBee Cash Flow Tutorial

Introduction to Budgeting Lesson

Calculating Budgets and Variance

Budgeting Crossword Starter

Calculating Budgets Student Worksheet

Student Budgeting Revision Worksheet

Introduction to Cash Flow Presentation

Introduction to Cash Flow Worksheet

Development of Cash Flow Skills Worksheet

 BeeBusinessBee Student Self Assessment Topic Tracker

C.1 Understand how businesses measure success

Making a profit – learners should:

● define cost of sales – the cost of producing a product

● define gross profit – the money made from selling a product (revenue) after the cost

of producing the product (cost of sales) has been deducted

● calculate gross profit (formula will not be given in the assessment)

● explain the impact of positive and negative gross profit on businesses

● define net profit – the money made from selling a product after all costs

(expenditure) have been deducted (formula will not be given in the assessment)

● calculate net profit

● explain the impact of positive and negative net profit on businesses

Measuring success by looking at financial statements – learners should:

● understand what financial statements are – documents that record the financial

activities of a business, sometimes required by law, including income statement

(profit and loss account) and statement of financial position (balance sheet)

Income statement (profit and loss account) – learners should:

● identify the purpose of a income statement (profit and loss account) – to show how

the business performed financially over a period of time (usually one year)

● complete an income statement (profit and loss account) from given figures,

including:

o trading account (top section of the income statement) – includes figures for

revenue (turnover) and cost of sales and calculates the amount of gross profit

o expenses/overheads (bottom section of the income statement)

o calculating net profit

Statement of financial position (balance sheet) – learners should:

● identify the purpose of a statement of financial position (balance sheet) – to show

the financial position of a business at a point in time

● understand the format of a statement of financial position (balance sheet)

● categorise total assets and liabilities using a statement of financial position

(balance sheet)

● understand that a statement of financial position (balance sheet) shows at a point in

time:

o how a business is funded (capital)

o how a business is using these funds (net assets)

● complete a statement of financial position (balance sheet) with given figures for a

small business (such as a sole trader or partnership), identifying:

o net assets – what the business owns, or is owed (debtors/trade receivables),

including fixed assets and short-term assets

o liabilities – what the business owes to others (creditors/trade payables), including

current liabilities and long-term liabilities

o capital – how the business is funded (money invested in the business to generate

revenue) from:

– internal sources – money from shareholders (share capital) or retained profits

– external sources – bank loans or other forms of finance that have to be repaid

o working capital – the amount of capital used to run day-to-day activities (current

assets minus current liabilities): if this figure is negative, the business may have

problems financing its day-to-day activities

 BeeBusinessBee Making a Profit Tutorial (YouTube Video Resource) 

BeeBusinessBee Statement of Financial Position (Balance Sheet) (YouTube Video Resource)

Types of Profit Worksheet

Gross and Net Profit Presentation

Introduction to Accounts (Income Statements)

Statement of Financial Position (Balance Sheet)

Financial Documents Workbook

BeeBusinessBee Student Self Assessment Topic Tracker

 Gross and Net Profit Quiz

Financial Statements Quiz 1

C.2 Understand how businesses can be more successful

Learners should:

● identify ways in which a business can increase profits

● analyse financial statements for a small business (such as a sole trader or

partnership) and suggest appropriate actions the business can take to succeed

 Increasing Profitability Worksheet

Impact of Changing External Factors on Business Costs

 BeeBusinessBee Student Self Assessment Topic Tracker

Business Studies Mock Exam 

Revision Guide / Plan

Exam Question Technique

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