Grade 10

Business

Summary
Business

Customer

Consumer

Ms Sarah

What have you studied this year?

1. Business Activity and Purpose
2. Added Value
3. Classification of Business 9Primary, Secondary and Tertiary)
4. Industry in the UAE
5. Business Growth
6. The Economy
7. Aims and Objectives
8. Stakeholders
9. Government Objectives
10.The Trade Cycle
11.E-Commerce
12.International Trade
13.Exchange Rates
14.Business Ownership sole traders, partnerships. Limited companies,
franchises, joint ventures
15.Multi-National Companies
16.Organisational Charts
17.Communication
18.Sources of Finance
19.Cash Flow
20.Profit and Loss
21.Balance Sheets
22.Ratios
23.Costs, Revenues and Profits

Ms Sarah

The purpose of business activity

(Chapter 1)
24.Business Activity is needed to satisfy peoples needs and wants.
25.A need is a good or service essential for living. E.g. food and water
26.A want is a good or service which people would like to have but is not
essential for living. E.g. cars, takeaway etc. Wants are unlimited (this means
people want lots of different things).
27.The economic problem results from there being unlimited wants but limited
resources to produce the goods and services to satisfy those wants. This
creates scarcity.
28.Scarcity is the lack of sufficient resources (factors of production) to fulfill
everyones wants.
29.The factors of production are the key resources that businesses use to
produce goods and services. There are four factors of production they are
land, labour, capital and enterprise.

All natural resources

provided by nature. E.g.
fields, forests, oil, gas etc.

Ms Sarah

This is people
needed to make
products and sell
services.

This is the skill and

risk taking ability
of the person who
brings the
resources
together. They are
called

This is the finance,

machinery
and equipment
Land
needed to make products
and services.

Enterpris
e

Factors
of
Productio
n

Labour

Capital

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hich wants we will satisfy and those which we wont. All choices involve givi
Examples
1. Individual
Car or Holiday??

2. Business
Machine A or Machine B???

3.

Government

New Road or New School???

Specialisation
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Division of labour is when the production process is split up into different tasks and
each worker performs these tasks. It is also known as specialisation.
Advantages
Workers are trained to specialize in one
area making them very good at their job
and increasing output and efficiency.

Disadvantages
Workers have to do the same thing
which can be boring.
Also if one worker is absent there may
be no other workers who can do the job.

Added Value
Businesses add value. This is the increased worth a business creates for its
products. It is the difference between what it cost the business to have the product
made and the price they sell it for. E.g. if we bought something for 10AED from a
supplier and sold it to a customer for 15AED the added value is worth 5AED.

Source of added
value

Explanation

Convenience

The easier something is to use or if it makes a customers life

easier the more they will pay for it. For example people will pay a
little bit extra for ready meals because they reduce the need to
cook.

Speed and quality

of service

In todays world customers expect high quality service. They may

therefore be more willing to pay a higher price to a business that
can deliver a high level of service. For example if you go to stay at
Ms Sarah

the Ritz Hotel in London you would expect to pay more because of
the level of service.
Branding

This is a named product which customers see as being different

from other similar products. The brand image therefore relates to
the idea/image the customer has in their mind about the brand. For
example Kelloggs have built up a brand image which helps them
sell their cereals.

Design and
Formulation

Having a unique design or a unique recipe or formula means

customers will pay more. For example because of Apple computers
unique design people are willing to pay a higher price.

Unique selling
point (USP)

This is something that makes a product different to other similar

products. This could be anything as long as it makes the product
unique. For example polos are unique because they are a mint with
a hole.

Quality

The better quality a product is the more likely people will pay more
for it. For example people are willing to pay more for Duracell
batteries.

You need to add value to survive. The most successful businesses are the ones that
achieve high levels of added value.
Aims and Objectives
Aims are the long term goals of the enterprise.
Objectives are the specific, measurable targets to help a business achieve an aim.
They are usually short to medium term. Objectives need to be SMART.

Specific a clear statement about what you will do.

Measurable how will the achievement be checked?
Achievable it needs to be attainable
Realistic it should be sensible and have a chance of being achieved
Time-Constrained it should include a date/time for achievement or
review

Examples of SMART objectives:

To have achieved my target grade in enterprise by the end of year 12. /To increase
sales in the business by 10% by the end of the year. /To reduce waste at the school
by 50% by 2014.
Ms Sarah

Survival

When a business first starts this is likely to be a key objective for

the first year. Also when trading is difficult some businesses may
be making little or no profit and therefore be focused on this aim
as well.

Break Even

This is a key aim linked to survival as it involves covering all

costs. However it also means the business doesnt make anything
either. They are said to not have made a profit or a loss. This is
often a key aim for new businesses in the first few years of
trading.

Increasing
Sales

This means trying to sell as much of your product as service as

possible. It can lead to higher profit but not always. For example
using 2 for 1 schemes is a good way to create more profit but
doesnt mean the business will make more money.

Profit
Maximisation

Most privately owned businesses have this as a main aim. Making

profit is important as it helps the business grow and also means
owners and shareholders are making money. Profit maximisation
means making as much profit as possible.

Environment

Increasing
Market Share

Being ethical

Growth

Having the environment as a key aim means a business is trying

to ensure that it is not endangering either the planet or the local
community/environment. It could involve try to cut back on waste
or trying to encourage others to take a more environmental
approach. E.g. a school encouraging its pupils to recycle.
This means getting more customers compared to your
competitors. The bigger your share of the market the more
customers you have.
This means doing the morally right thing. An enterprise that is
ethical wont just do the minimum that's expected of them they
will try to go that step further. For example the Fair-trade
Foundation ensures producers get paid more than minimum
wage.
Many businesses want to sell more every year and focus on
expanding the business. They may plan to open more branches or
start selling more products.

Ms Sarah

Stakeholders
Stakeholders are any person or organisation who has an interest in a business and
its activities.

Owners
Workers
Managers
Consumers
Government
The community
Suppliers
Banks (if they have lent the business money)

Stakeholders can be internal, connected or external.

Internal
These are stakeholders
within the organisation.
E.g. workers, owners,
managers

Connected
These are stakeholders
who are closely linked.
E.g. customers, suppliers,
shareholders

External
These are stakeholders
who outside.
E.g. banks, local
community, the
government

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Conflicting Objectives
Stakeholder conflict occurs when stakeholders have different objectives.
Different stakeholders have different objectives. The interests of different
stakeholder groups can conflict. For example:

Owners generally seek high profits and so may be reluctant to see the
business pay high wages to staff.
A business decision to move production overseas may reduce staff costs. It
will therefore benefit owners but work against the interests of existing staff
who will lose their jobs. Customers also suffer if they receive a poorer service.

The purpose of business activity revision questions

1. List two needs. (2)
2. List two wants (2)
3. Explain what is meant by scarcity (2)
4. List the four factors of production (4)
5. Explain two examples of opportunity cost (4)
6. Explain two benefits to society of business activity (4)
7. What is meant by business objectives? (2)
8. Explain two business objectives a business might have. (4)
9. Define added value(2)
10.Explain 2 ways a business might add value (4)
11.List two examples of stakeholders in a business (2)
12.Using examples, explain two reasons why conflict might occur between the
stakeholder groups you listed in qs 11. (4)
Case Study Purbeck PLC
Purbeck PLC owns and manages a major leisure complex. The directors of the
company are considering demolishing the new complex and building a shopping
Centre, the directors have different opinions about the plan.
The Human Resources manager says that too many groups of people would
suffer from the plan. He thinks that the plans should be dropped.
The Chief Executive says that his main responsibility is to the owners of the
business and that profit should come first.

1. Explain 2 ways the workers at the leisure Centre would be affected by the
decision. (4)
2. Do you agree with the Chief Executive that profits should be the main aim of
the business? Explain your answer (6)
Ms Sarah

Types of Business Activity (Chapter

2)
Types of Industry
Primary

This stage involves the earths

natural resources.

Farming, fishing, forestry,

mining etc.

Secondary

This stage involves taking the

materials and resources from
the primary sector and
changing them into a good.

Manufacturing and
construction

Tertiary

This stage involves providing

services to both consumers
and businesses. It is often
known as the service sector.

Retail, transport, banking,

leisure, hotels etc.

Chain of Production

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Business Size
Businesses can vary greatly in size. Business size can be measures in a number of
ways.
Method
Number of Employees

Explanation
This method is easy to
understand, it just
measures a businesss size
on the amount employees
they have.

Problems
This doesnt always give a
true picture of the size of a
business. For example
many larger businesses use
machinery and have cut
back on staff but they are
Ms Sarah

By Value of Output and

Sales

This is a common way of

comparing businesses in
the same industry. It looks
at how much a business
has produced or how much
it has sold. The more it has
produced or the more sales
it has the bigger it is.

By Capital Employed

This looks at the total

capital invested into the
business.

By Profit

Profit looks at how much

money a business has
made after it has paid all its
costs.

still large businesses.

A business like Ferrari may
only sell 1000 cars a year
whereas a business like
Nissan may sell 10,000.
Ferraris though sometimes
can be millions of dhs and
therefore even they have
made and sold less Ferrari
may have still made more
money.
A company employing lots
of workers may have not
spent much on capital this
does not mean though it
isnt a large business.
Profit depends on more
than just the size of the
business. It also depends
on the efficiency and skills
of the managers. Some
large businesses make low
profits because they are
badly managed.

There is no perfect way of comparing the size of a business. It is quite common for
more than one method to be used.
Business Growth
Businesses can expand by two main ways:

External Growth

Internal Growth
This involves growing from
within. For example opening
more stores or expanding your
product range.

This involves takeovers and

mergers with other
businesses.

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Types of External Growth

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Types of
business activity
- revision

questions
1.

Explain the difference between

primary, secondary and tertiary
industry (6)
2. Explain two methods a business
might use to measure its size.
3.
4.
5.
6.

(4)
What is the difference between a takeover and a merger? (4)
Explain the difference between internal and external growth (4)
Explain what horizontal integration of business means. (2)
Explain the difference between forward vertical integration and backward
vertical integration. (4)

Case Study Hairdressers

The owner of a small hairdressing business asks for your advice. She is planning
Ms Sarah

on expanding the business. New branches will be opened and many more staff
will be employed. She asks you to make a list of the possible advantages and
disadvantages.

1. Explain if this is an example of internal or external growth (2)

2. Explain the advantages and disadvantages of the owners decision (6)

Forms of Business Organisation (Chapter 3

pg. 30 to pg. 45)
When setting up as an enterprise there are different structures you can take.
Type of enterprise

Advantages

Disadvantages

Sole Trader
This is an
enterprise owned
by 1 person.

Easy to start.
Get to keep all the
profit.
Get to make all the
decisions.

You have unlimited

liability.
Lack of specialisation.
The hours will be long.

Partnership

Spreads the risk.

May be disagreements

Unlimite
d/Limited
Liability
Unlimite
d liability

Unlimite
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This is an
enterprise owned
by 2 to 20 people.

More people with

different
specializations.

and conflict.

d liability

Limited Companies
This is an
enterprise owned
by shareholders.
There are 2 types
of limited company
private (LTD) and
public (PLC)

Limited liability.
Easier to raise finance.
Tend to be large well
recognized
enterprises.

Not as easy to set up as

a sole trader there are
more regulations.
You have to pay 2 types
of tax.

Limited
Liability

Franchise
This is an
enterprise in which
a sole trader can
pay an existing
business to use
their name and sell
their product for a
fee.
Co-operatives
These are
enterprises that
are either workers
by the workers or
the customers.

88% of franchises are

profitable.
You get support from
the franchisor when
you start the
enterprise.
The enterprise may
already be well
known.
People working/using
the business will also
be the owners as well
and therefore they
may work harder to
make the enterprise a
success.
Sharing of costs
Sharing of risk
Local knowledge

You have to pay a % of

your profit each year to
the franchisor.
You cannot choose what
you sell.
The more well known the
enterprise is the more
expensive the start-up
fee will be.
Decision making can be
slow.
The owners may lack the
skills needed to run an
enterprise.

Limited
Liability

The profits have to be

shared
Disagreements may
occur
Different business
cultures

Each
business
has their
own
liability
dependin
g on
their
ownershi
p
structure
.

A joint venture
This is when two or
more businesses
agree to start a
new project
together, sharing
the capital, the
risks and the
profits.

Limited
Liability

1. Sole trader (Key Words)

Specialisation the skills that the sole trader has.

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2. Partnership (Key Words)

Deed of partnership the document that the partners complete so
they know how much control and what % of the profit each partner is
entitled too.
3. Limited Companies (Key Words)
Private limited company a company whose shares are not sold on the
stock market.
Public limited company a company whose shares are sold on the
stock market and anyone can buy them.
Memorandum and Articles of Association the two documents that
must be completed before the limited company can start trading.
Shareholders these are the owners of the business. They own a
share of the company. The bigger their share the more control that
they have.
Dividends this is the reward given to shareholders if the business
makes a profit.
4. Franchises (Key Words)
Franchise a type of enterprise in which a sole trader can pay an
existing business to use their name and sell their product for a fee.
Franchisee the sole trader who runs the franchise.
Franchisor the business who allows the sole trader to use their name
and sell their products/services.

Ms Sarah

Forms of Business Organisations revision questions

1. Which forms of ownership do you think are the most suitable for the
following businesses? Explain your answer. (6)
a. A number of workers have been made redundant (lost their jobs)
following a business failure. They agree to put some of their savings
together to buy an old factory. They plan to make bicycles to
export. They want everyone to have equal rights in running the
business.
b. A young student is planning on offering his services to his
neighbours as a gardener. He will purchase cheap tools to start
with.
c. The owner of a business fixing cars wants to expand and grow. He
wants to protect his personal assets though before he expands.
2. Explain two disadvantages of a partnership. (4)
3. Explain two benefits to a sole trader of becoming a limited company (4)
4. Explain three possible disadvantages of changing a private limited
company into a public limited company? (2)
5. State two reasons why two businesses might decide to set up as a joint
venture? (2)
6. Explain what is meant by a franchise. (2)
Case Study Ownership
Tom has just gained a qualification in food catering. He wants to run a small fast
food outlet. He is not sure whether to run it as a sole trader or look for a
franchise opportunity.

1. Explain one advantage and one disadvantage for Tom if he decides to run
the business as a sole trader. (4)
2. Recommend whether Tom should run his business as a sole trader or as a
partnership. (8)

Ms Sarah

Economic Environment (Chapter 4

pg. 51 to 62)
The following table outlines some of the benefits and drawbacks of business activity.
Benefits to society
Production of useful goods and
services
Creation of jobs
Improves living standards
Pay tax to governments
Produce goods for exports

Drawbacks to society
Managers aiming to lower costs
might offer very low wages and
unsafe working conditions
Pollution
Certain goods produced can be
dangerous
Monopolies
Advertising may mislead
customers

Governments and the economy

The governments objectives are:
roduct It is a measure of the national income and output for the country's economy.

1.
2.
3.
4.

Achieve low levels of inflation

Achieve low levels of unemployment
Gain economic growth
Create a surplus on the balance of payments

Objective

Definition

Why

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Inflation
Low inflation
encourages
businesses to
expand and it
makes it easier
for a country to
sell its goods
abroad.

Unemployment
Low
unemployment
helps increase
output and
improves
workers
standard of
living.
Economic
Growth
This relates to
the Trade Cycle.
Countries want
to be in a
boom and
avoid
recession.

Balance of
Payments
Countries want
a surplus on
their balance of
payments as
this means they

This is the increase in

the average price level
of goods and services
over time

Inflation occurs when prices rise. If

prices rise too quickly this causes
problems.
Workers wages will not buy as
many goods as before.
Prices of goods will be higher than
those in other countries
Businesses will be unlikely to want
to expand or create jobs.
The living standards of the country
are likely to fall.

This exists when people

who are able and
willing to work dont
have a job.

This occurs when people who can work

cannot find a job.
Unemployed people do not produce
goods or services meaning the
output of the country will fall.
The government will have to pay
benefits to unemployed people
meaning money cannot be spent on
other things like schools, hospitals
etc

This is when the

countrys GDP (Gross
Domestic Product)
increases.

An economy is said to grow when the

total level of output of goods and
services in the country increases. The
value of goods and services is called
GDP. If GDP is falling there are
problems:
Fewer workers are needed which
leads to unemployment
The standard of living in the country
will decrease
Businesses will not expand as
people have less money to spend

This records the

difference between a
countrys imports and
exports.

If a country has a deficit on its balance

of payments then this can cause
problems.
The country may end up in debt if it
spends more on imports then it
makes from exports.
Its currency may lose value making
foreign goods more expensive.
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are making
money from
exports.

The Trade Cycle (The Business Cycle)

Everyday people make decisions to buy goods and services. Businesses provide the
goods and services that we want to buy. Economic activity relates to the amount of
buying or selling that takes place in a period of time. Rises in the amount of
economic activity is called economic growth and is this is measured by sales over a
period of time. We can also look at this using the Trade Cycle.

Ms Sarah

Government Policies
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Governments have a great deal of power. They raise taxes and spend this money on
a wide range of services and benefits for the people living in their country. The main
way that governments influence the economy is through economic policies. The
main economic policies are:
Fiscal policy
Monetary policy
Supply side policy

es These are taxes paid directly from peoples/businesses incomes

t Taxes - These are taxes that are added to the price of goods.

1
2
3

Interest Rate The cost of borrowing money.

Debt this is when you owe money usually to a bank.

ieving maximum productivity with minimum wasted

effort Income
or expense.
Disposable
this is the level of income a person has after paying t

Government

Explanation

Other Information
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Policy
Fiscal Policy
This is any
change by the
government
to taxes or
government
spending.
Monetary
Policy
This is
changes in
interest rates
by the
government
and the
central bank
of a country.

Supply Side
Policy
These are
policies used
by
governments
to improve
the efficient
supply of
goods and

Governments raise money

to spend on things such as
schools, hospitals and
roads from taxes on
individuals and businesses.
This is known as Fiscal
Policy.

The main taxes are:

1. Direct taxes
Income tax
Corporation tax

An interest rate is the cost

of borrowing money.
Monetary policy is used to
set the interest rate.
Changing the interest rates
can help control spending
(and this means helping
reduce inflation if its too
high or encourage
economic growth if it has
slowed down)

Increasing interest rates:

Consumers and Business will
spend less as their debts will be
more expensive reducing their
disposable income. This reduces
inflation as there is less demand.
Consumers and Businesses will
borrow less as borrowing money
becomes more expensive. This
means they will buy less.

2. Indirect taxes
VAT
Import Duties and Tariffs

Decreasing interest rates:

Consumers and Businesses will
spend more as their debts will be
cheaper meaning they have more
disposable income. This helps
economic growth.
Consumers and Business will
morrow more as borrowing money
becomes cheaper. This means
they have more money to spend
(particularly on large items)

Privitatisation moving
government industries into the
private sector (e.g. In the UK
electricity and gas services used
to be owned by the government,
in the 1990s the government let
private businesses (limited
companies) run them.
Improve training and Education
The government can improve the
skills of the workers in its country
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services in
their
countries.

by changing school curriculums

and offering grants for people to
go on courses to learn new skills.
Increase competition
governments make it illegal for
businesses to run monopolies.
This helps ensure there is
competition.

International Trade
The level of development of a country affects its imports and exports.

Imports what a country buys from abroad

Exports what a country sells abroad

Average incomes in high income countries are tens of times higher than low income
countries. This helps explain why high income countries (UK, USA etc.) spend more
on imports. E.g. in the UK they buy clothes made in China, toys made in India, take
holidays abroad, buy foreign cars etc. .
For the UK, European and American businesses this also means that they are more
likely to sell goods to developed countries with higher incomes.
Wages and Prices UK, European and American businesses and consumers can take
advantage of low wages paid to workers in developing countries. Companies like
Primark and Topshop can then offer very low prices. Therefore developing countries
are a source of cheap imports.
Quality and Technology - Price is one factor that influences a consumers decision to
buy. The quality and level of technology of the product is important too. Many
products made in developing countries are poor quality and have little technology.
This means that often consumers in richer countries choose not to buy them. In
comparison developing countries tend to buy high quality, high technology products
from developed countries.
Import Protection and Export Subsidy Nearly every country in the world operates
protectionist policies. These are measures designed to reduce the amount of
imports coming into a country.
4

Import Protection These are measures designed to reduce imports. They are
usually taxes that which are put on goods that are imported into a country which
will make them more expensive for buyers to discourage them from buying
abroad. The main types are:
a. Tariffs a tax on an imported good.
b. Custom Duties a physical limit to the amount of a product that can be
brought into the country
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Export Subsidies - These are measures that reduce the price of goods sold
abroad. This will then hopefully make a countrys exports more price
competitive.
Export subsidies can include: reduction in tax, grants and
subsidies.

E-commerce
E-commerce is short for electronic commerce. Using E-commerce gives businesses
access to customers all over the word. This is known as The global market which
is reached by means of a website.
Advantages of E-Commerce to
Businesses
Access to the global market means
the business will be better known
A business using e-commerce can
get ahead of its rivals

Increased sales, leading to

increased profit

Savings on expensive showrooms

Reduced advertising costs

Increased sales leads to economies

of scale

Business is open 24/7

Advantages of E-Commerce to
Consumers
Customers have a huge range of
goods to choose from
They can shop around the web for
the best bargain
Internet prices are often lower than in
shops
Customers can shop from the comfort
of their own home 24/7

Disadvantages of E-Commerce to
Businesses

Disadvantages of E-Commerce to
Consumers

Being part of the global market

means the business is in competition
with lots of others
Designing and keeping the website
up-to-date is expensive and requires
specialists
Market research needs to be very

Customers need to own or have

access to a computer and be on-line
and know how to use the Internet.
It is not easy to assess the quality
and suitability of many products on
the screen.
Inconvenience of returning unwanted
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detailed to meet the needs of

customers in such a wide market
Packing and distribution of products
can be very costly and involve long
distances
Not all the businesses target
customers have access to the
internet.

goods.
Customers usually have to have a
credit card to make Internet
purchases
Security risks of buying on-line

Economic Environment revision

questions
1. Explain three government objectives (6)
2. Explain two disadvantages to a countrys economy arising from rapid inflation
(4)
3. Define economic growth (2)
4. Define GDP (2)
5. Draw a labeled diagram of the trade cycle (6)
6. Explain the difference between a boom and a recession (4)
7. What does a deficit on the balance of payments mean? (2)
8. Explain the difference between indirect and direct taxes (4)
9. How would the governments decision to lower interest rates affect the demand
for luxury foreign holidays? (2)
Case Study Ownership
Two managers are comparing details about their businesses.
Firm A produces DVD players. Many of these are exported. The business has
Ms Sarah

expanded recently has borrowed large sums of money from banks.

Firm B produces flour for bakeries. It buys it wheat from other countries.
Both managers are discussing the following recent changes in government
policy:

Increased interest rates

Higher tariffs on imports
Raised income taxes

1. Which business do you think will be more affected by these changes?

Explain your answer (12)

Business Costs and Revenue

(Chapter 6 pg. 89)
Costs, Revenues and Profit
Sales Revenues (sometimes called sales
turnover)
Costs

The amount of money made from selling

goods before costs.
The bills and debts the business has to
pay.

Profit

The money the business makes from

selling goods after all the costs have

re the costs that vary depending

Fixed Costson
these
how much
are the
you
costs
make
that
or stay
sell. the
E.g. same
Materials
no matter
and supplies
how much you make or sell. They

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i. Total Revenue This is calculated using the following formula:

Price x Quantity
ii. Costs there are 3 types of costs:
a. Fixed Costs These are the costs that stay the same no matter how much
you make or sell. E.g. rent, salaries, business rates. They still have to be paid
even if the business makes no money
b. Variable Costs These are the costs that change according to how much you
make/sell. E.g. materials, production costs. Variable costs are calculated
using the following formula:
Total Variable Costs = Variable Cost x Quantity
c. Total Costs this is the fixed and variable costs added together. You cant
work this out until you know both the fixed and variable costs. It is
calculated by using the following formula.
Total Costs = Fixed Costs + Variable Costs (Variable Cost x Quantity)

iii. Profit - Profit is the difference between your revenue and your
costs, whatever you have left is your profit. It is calculated using
the following formal:
Profit = Total revenue Total costs

Costs, Revenues and Profits

revision questions
Case Study
Ben the Barber has decided to set up in a small shop in a mobile unit on a empty
piece of land near the Sheik Zayed Road as barber. He plans to offer barber services
to people on their way to work. Having been a hairdresser in a conventional shop he
found the costs were getting larger and larger and he was struggling to cope. He
therefore decided to run a mobile shop to reduce his costs and increase his revenue
and hopefully his profit.
Ms Sarah

Ben has worked out that he will have a number of costs. The costs that he will have
to pay each month include: heating and lighting, business insurance and the wages
of one member of staff. He estimates that these costs will equal 50,000dhs a year.
He will also have costs that related to the amount of customers he sees. These
include shampoo and material costs. He estimates that these will be about 5dhs per
customer.
Ben has worked out that over the year he will see 4,000 customers a year working 5
days a week. He also estimates that on average each customer will pay around
20dhs .
Questions
1. Explain what a fixed cost is. (2)
2. List Bens fixed costs. (3)
3. Explain what a variable cost is. (2)
4. List Bens variable costs. (2)
5. How many customers does Ben think he will see in a year? (1)
6. What is the average price that will be paid by customers? (1)
7. What will be Bens total revenue for the year? Show your working. (3)
8. Ben has worked out that his fixed costs will be around 50,000dhs a year and
that his variable costs will be 5dhs per customer. Work out Bens total costs.
Show your working. (3)
9. How much profit will Ben make over the year serving 4,000 customers a
year? Show your working (3)
10.Would Ben still make a profit if he only served 2,000 customers in a year?
Show your working (12)

Ms Sarah

Finance (Chapter 7 and 9)

Sources of Finance
Leasing

External
Short
term

Governm
ent
Grants

External

Mortgage

External

Long
term

Long
term
Loan

External
Long
term

If a business needs equipment but cant afford to buy it

outright they can rent it. The good thing about this source is
that if the item breaks then the rental company pays for it not
the business.
Some new businesses can get start up grants from
organisations. These are often available in areas with high
unemployment rates.
This is a long term loan that is used to buy property. It is paid
back with interest. If is not paid the property will be
repossessed.
This is money that is borrowed from a bank or other financial
organisation to start a business or buy an expensive item. It is
paid back with interest.

Venture
Capital

External

Share
capital

External

Retained
Profit

Internal

This is money that the business saves from profit they have
made. It is the cheapest source of finance to use as it belongs
to them and they dont have to pay it back.

Factoring

External

This is a source of finance where a business is able to receive

cash immediately for invoices it is waiting for customers to
pay. There is a charge for this and the business will have to
pay the amount back in 30 days. It is not suitable for all
businesses.

Long
term

Long
term

Short
term

This is an individual or a company that invests in a small to

medium sized business that is growing fast in the hope that
they will eventually be able to sell their part in the business
and make a profit. The dragons in the Dragons Den could be
described as venture capitalists.
This is when investors can buy a % of the company. This
means they take part ownership of the company. The higher
% you have the more ownership rights you have. If the
business makes a profit the shareholders get rewarded with
a dividend. This method can only be used by limited
companies.

Ms Sarah

Overdraft

External
Short
term

Trade
Credit

External

Sale of
Assets

Internal

Short
term

Short
term

This involves borrowing money from a bank by taking more

money than is actually in the bank account. Interest is
charged on the amount and this can be extremely high.
When ordering supplies a business may be able to delay
payment to the supplier. Normally 30 days is given to pay the
bill. This is good for businesses that need supplies to
complete the job but dont get paid till the job is completed.
For example a builder or a plumber.
This is when a business sells assets and equipment it owns
that it doesnt need or want anymore.

When deciding on which source of finance to use an enterprise should consider the
following factors:
Cost borrowing money means the business is in debt. It also means they will not
only have to pay the amount they have borrowed back but usually the interest as
well. Interest is the extra charged when you borrow money. Interest increases the
costs and some sources of finance have more interest than others. For example
overdrafts usually charge interest on a daily basis making them very expensive if
you use them for a long time.
Risk the more money you borrow the higher the risk. For example if you take out a
mortgage and cant pay it back the company that lent you the money will reposes
(take away) the property.
Availability not only sources of finance are available to all types of business. For
example only limited companies can sell shares and use factoring. Smaller
businesses like sole traders and partnerships usually find it much harder to raise
finance.
Time (short long) the amount of time you need the money will also affect the
source of finance you need. For example if you only need money for a short period
of time to buy some stock then you might use trade credit, whereas if your require
a large sum of money to buy an expensive piece of machinery you may need to
take out a loan which you can pay back over a longer period of time.
Key finance words
Credit

The ability to obtain goods or services before payment, based on

the trust that payment will be made in the future.

Ms Sarah

Creditor

A person or company to whom money is owed.

Debt

Money that is owed.

Debtors

A person or institution that owes a sum of money.

Investment vs. Saving

In finance, investment is putting money into something with the expectation of
gaining more back. Most or all forms of investment involve some form of risk.
Saving is income not spent. Methods of saving include putting money aside for
example in a bank account. It is low risk compared to investment.
Saving

Investment

Advantage
s

Dont owe any one any money.

Less risk.
Money will be available for other
projects.

Could make a lot of money.

Could lead to greater success.

Disadvanta
ges

No gain your savings stay the

same.
You cant run an enterprise if
you dont invest.

High risk.
Could lose investment and more
(especially if there is unlimited
liability).
You wont be able to use the
money for anything else.

Budgets
A budget is a plan to show how much money a business will earn and how much
they will need or be able to spend.

As budgets also set limits for the business, it could set new goals and
targets for the business department.
As it is a limit, it could also be used to limit business activity which would
increase your control of the business and make it easier for you to
control the business.
Making budgets and making the future plans will include all employees
and managers which means that the employees would feel more
confident to be involved in such a process which involves the future of a

Ms Sarah

business, and therefore it increases their motivation making them more

productive.
As budgets are a limit, and a business tries its best to gain profit as it is
its main aim, the business will try to not waste money and use it as
efficiently as possible, and so we have achieved a more efficient
business.

The key words used in a budget are:

Income/Revenue

This is how much money comes into the enterprise.

Expenditure/Spen
ding
Direct Costs

This is how much money the enterprise has to spend.

Indirect Costs

Direct cost is the cost that used to produce a good. E.g.

material and labour costs.
Indirect costs are the cost that not directly related in
production of the good. E.g. sales and marketing costs.

Overheads

In business, overheads refer to an ongoing expense of

operating a business; it is also known as an "operating
expense". Examples include rent, gas, electricity, and
wages.

Fixed Costs

These are costs that the business has to pay each

month/year that will never change depending on how much
they make or sell.

Profit

The money a business has after it has paid all its costs.

Surplus

The amount left over.

Loss

If a business spends more than it makes then it will make a

loss.

Deficit

When the business doesnt have enough money to pay all

its expenses and costs.

Cash Flow
Cash is vital to success. In business cash is money in the business and
money in the bank. A business needs cash to survive on a day-2-day basis.
This is because cash is needed to pay bills. If all the cash is tied up in assets
then it will struggle to pay its expenses.
Cash flow = money coming in and out of the business.
Ms Sarah

A cash flow forecast/statement has the following information:

Net cash flow = Receipts (INFLOWS) Outgoings (OUTFLOWS)

Closing bank balance = Net cash flow + Opening bank balance
Opening balance = is always the previous months closing balance

Example of a cash flow forecast/statement (as part of your revision can you fill in
the blanks?):

Ms Sarah

A Negative net cash flow means the business has lost money and a negative
bank balance means the business is in debt.
Gross Profit is
Sales Revenue Cost of
Sales

Profit and Loss

Less

Less

Sales Revenue

830000

Cost of sales

417000

GROSS PROFIT

413000

This part is
called the
trading
account.

Expenses
Wages and salaries

145000

Rent and Rates

50000

Heat and Lighting

25000

Telephone and Post

12000

This part is
called the
profit and
loss
account.

Ms Sarah

Advertising

15000

Insurance

23000

Other Bills

35000
305000

NET PROFIT

108000

Government

30000

Dividends

50000

Retained Profit

28000
108000

This part is
called the
appropriati
on
account.

These two figures should

Net Profit is:
1. Keeping Records
be equal (net profit =
Gross Profit Total
total amount in the
Expenses What is a profit and loss account? It summarises:
appropriation account).
a. All the sales revenue for the financial year.
b. All the payments and expenses for the same year.
It also shows whether the business has made a profit or a loss in that year.

The profit and loss account is made up of three parts:

Ms Sarah

Trading account this is the direct costs of making the product and the
money made from selling the product.

Profit and loss this looks at all the costs the business has and if they have
made a P/L.

Appropriation Account this shows what the business will do with any profit
it has made

Part 1 The Trading Account

The first part of the profit and loss account is the trading account.

This is record of sales turnover and the cost of sales.

It looks at the businesses gross profit

Part 2 The Profit and Loss Account

Ms Sarah

Part 3 The Appropriation Account

Corporation Tax

Public and private limited

companies have to pay
corporation tax on their
net profit.

Income Tax

Sole traders and

partnerships have to pay
income tax on their net
profit.

Balance Sheets

Ms Sarah

As part of your
revision can
you complete
the balance
sheet?

Ms Sarah

Ms Sarah

Ms Sarah

Ratios
Performance Ratios these ratios are used to measure how well a
business has performed during a financial year.
1. Return on Capital Employed (%) - This ratio is used to prove the value the
business gains from its assets and liabilities. The higher the % the more
successful the business is.
= Operating profit
Capital EmployedX10
0
2. Gross Profit Margin (%) A measure of how well a company controls its
costs. The higher the % the more the business has made (before costs). This
could be because it has low costs or it is charging customers more.
= Gross profit
Sales turnover
X10
0
3. Net Profit Margin This shows how profitable the business has been. The
higher the % the more successful the business is.
= Net Profit before tax
Sales turnover
X10
0

Important Note

The reason we times are answer by

100 is that we need to make the
Liquidly Ratios these ratios tell s
answer into a %.
1. Current Ratio The current ratio is a financial ratio that measures whether
or not a firm has enough resources to pay its debts. It looks at the ratio of
assets to liabilities. If the ratio shows they have more liabilities it means they
would struggle to pay their debts. A figure below one means the business
does not have enough current assets to pay off its debt. A figure between
1 and 1.5 means they have just enough current assets to pay off their debts
and a figure above 1.5 means the business has enough current assets to
pay off its debts.
= Current assets
Current liabilities

2. Acid Test Ratio This ratio works the same as current ratio except it looks
at the businesses cash only.
= Current assets stocks
Current liabilities

Ms Sarah

Keeping Financial Records Record keeping:

Good for your business

Keeping records makes sound business sense. It may seem like a challenge,
particularly when you're starting out, but keeping good records will bring real
advantages to your business. Keeping good records
a. helps you avoid paying too much tax
b. avoids interest and penalties by making it easier to pay the right tax at

the right time

c. gives you the information you need to manage your business and help

it grow
d. makes it easier to get a loan
e. helps you budget for tax payments

Record keeping in three simple steps

There are three steps to remember:
1. Set up a system It doesn't matter whether you use a special
account book or a software package as long as you set up some kind of
system to keep the information together.
2. Keep records throughout the year Keeping only some of your
records is almost as bad as keeping none at all. Update your records
regularly, rather than letting the paperwork pile up.
3. Keep your records for as long as required There are minimum
periods for which you must keep records, e.g. six years for VAT or five
years from the latest date for filing your

Why do you have to keep records?

The law says that everyone who pays tax must keep the records they need to
fill in a tax return. If you don't keep records, how can you show what you've
earned and what you've spent?

Ms Sarah

The tax man might decide to look into your tax returns or claims. If they do,
they may want to look at your records. It will save you time if you can show
that the records you have kept are full and accurate. It can also save you
money we can issue fines if records are not kept properly.

What happens if I don't keep proper records?

You dont want to pay too tax. However, if you can't show sufficient evidence
of your income and outgoings, you could end up paying more tax than you
should.

Finance revision questions

1. State two reasons why managers need financial information about their
business. (2)
2. Explain the difference between gross and net profit. (4)
3. What does an appropriation account on the profit and loss account show? (2)
4. Explain what a balance sheet tells a business. (2)
5. Distinguish between business assets and business liabilities. (4)
6. What is meant by capital employed? (2)
7. What does return on capital employed of 20% mean? (2)
8. Why would a current ratio of 0.75 be considered too low? (2)
Case Study
Use performance rations to analyse these accounting results for P&K Ltd which is a
building firm. (All in $000s). Has their financial position improved from 2011 to
2012? (12)
2011 ($000s)
2012 ($000s)
Gross Profit
15
16
Expenses
6
9
Ms Sarah

Capital Employed
Sales Turnover

70
100

80
120

Calculate the acid test ratio for both 2011 and 2012. (All in $000s). (6)
2011 ($000s)
2012 ($000s)
Current liabilities
15
18
Stocks
3
4
Debtors
12
8
Cash
5
4

Organisational Structure (Chapter

10)
Hierarchy This is when businesses are organised according to authority. The
person with the most authority is at the top of the organisation.
Hierarchy

The flatter the structure the

less layers of employees
there are. Removing layers is
called delayering.

Flat Structure

Chain of command this is the order in which information is passed down the
organisation. Usually it is from top to bottom.
a. Long chain of command this means there is lots of layers/people that
information has to pass through (this means messages may get lost)
b. Short chain of command this means there is only a few layers/people that
the information has to get passed through.

Chain of
Command

Problems of a long chain of

command
Disagreements may occur
Information get altered/lost

Benefits of a short chain of

command
The opposite of the problems of
having a long chain
Ms Sarah

Information misunderstood
Information slow to be passed
down
Hard to take information back
once its in the organisation
Span of control this is the number of people an employee is responsible for.
a. Wide span of control this means you are responsible for managing a lot of
people.
b. Narrow span of control this means you are responsible for managing only a
small group of people
Problems of a wide span of
control
Span of
Control

People might not understand

what they have to do
People may feel that the boss
doesnt value them or know
who they are
It can be difficult to manage
and be responsible for lots of
people

Benefits of a small span of

control
The opposite of the problems of
having a wide span of control

Types of Structure

Ms Sarah

Centralised most
decisions are taken at the
centre of the business
with little delegation.

Decentralised
decisions are not made
at the centre of the
business and are
delegated to smaller

Organisational Structure revision

questions

1. What is meant by organisational structure? (2)

2. What is the chain of command(2)
3. Explain what is meant by the term span of control. (2)
4. Explain two disadvantages of a wide span of control (4)
5. Explain what is meant by organisation by function. (2)
6. What is the difference between a decentralised and a centralized organisation?
(4)
Ms Sarah

7. Explain two advantages of using a decentralised structure. (4)

Case Study
Within an organisation there are many different roles that staff will undertake. These
include
a. The Managing director - The Managing Director is the figurehead of the
organisation. Managers have the job of organising and controlling
resources. Their work is often described as 'getting things done with or
through people'. They are likely to have overall control over everyone
working at the organisation.
b. Senior managers - Senior Managers make top level decisions concerning
where an organisation operates and what it makes or does. These
decisions require detailed analysis and skilled judgment. They are
managed by the directors but they manage all the other staff like the
middle and junior managers and the supervisors and operatives.
c. Middle managers - Middle Managers organise and control the resource of
an organisation within established guidelines. They are often managed by
senior managers who pass on information to them from the directors.
They will in turn manage a team made up of the junior managers,
supervisors and operatives.
d. Supervisors - Supervisors are quite often the backbone of the
organisation. They are people who know how things should be done at
'ground level'. They work with managers to put plans into action at
operational level. They manage day-to-day resources including the
supervision of staff. They will be given instructions from the managers in
the organisation.
e. Operatives - Operatives are at the ground level but their work is still very
important. It needs to be carried out with care and precision. In a
supermarket the operatives will include the shelf stackers, and checkout
operatives. They will be told about their role from supervisors and
managers. It is likely that they will not be responsible for anyone in the organisation.
Choose three of the roles listed above and answer the following questions: (12)
1. What are the main jobs associated with this role?
2. Who is in charge of them?
3. How important is their role in the organisation.

Communication (Chapter 12)

Ms Sarah

The Message
Communication is the passing on of ideas and information. In business we need
good, clear communication. The contact may be between people, organisations or
places and can be in a number of forms such as speech, writing, actions and
gestures. Organisations need to be structured in such a way as to maximise the
benefits of communication processes. This is why team structures are so useful
because they open up a multi-flow channel of communications.

Noise

Noise
Noise

Noise

Message
Receiver

Sender

Feedback

Noise = This is anything that would stop the message being received. For example:
a broken phone, a lost letter, a bad internet connection etc. These are sometimes
referred to as barriers to communication.

Barriers to communication can include:

Poor explanation
Receiver not understanding the message
Messages getting distorted
Equipment breaking
Not enough information
Too much information

Types of Communication
Verbal

Non-Verbal
Ms Sarah

This is spoken communication.

This involves things like body language or

sign language.

Written

Visual

This is written communication like a

letter.

This can include graphs, drawings charts,

signs and symbols.

Verbal
communication

Written
communication

Visual
communication

Advantages
Information is given quickly
Feedback may be given
quickly
Body language and tone can
reinforce the message.

Disadvantages
How do you know if people are
listening
There may be no record of what
is said

There will be a record

Lots of detail can be listed
and revisited
It can be copied and sent to
many people
It can be cheap e.g. emails
are cheap to send.
Appealing and attractive
and can persuade people to
act

Direct feedback is not always

possible
There can be misunderstandings
with language
There is no opportunity for
things body language.

It can help make written

communications more
interesting

No feedback unless use written

or verbal as well
Graphs and charts sometimes
people dont understand them

Internal communication communication between people within the

business (e.g. a manager and their team).
External communication communication by the business with someone
outside the business (e.g. the finance department and a supplier).
Formal communication communication that is professional and through
channels that are recognised by the organisation.
Informal communication this involves other forms of interactions
between organisational members that are not recognised by the
organisation.

Ms Sarah

Methods of Communication

Letters

Face-2Face

Email/Tex
t
Methods of
Communicati
on

Fax

Phone

The Direction of Communication

a. Horizontal communication this is communication between employees who
work at the same level in an organisation. E.g. two members of the same
department talking about their work.

b. Vertical communication this is communication between employees at

different levels in an organisation. E.g. a manager outlining what he wants his
team to do.

Ms Sarah

c. Communication on the grapevine communication on the grapevine

is gossip. This is usually not
related to work. Organisations try to
discourage this type of communication.

The importance of good communication

Good communication is essential to any enterprise. Below are some reasons why
it is so important:
a. Customers poor communication leads to problems with the quality of
products provided to customers. Customers who are left dissatisfied may not
use the organisation again, therefore communication between the enterprise
and the customers has to be carefully planned and correct.
b. Suppliers poor communication will suppliers can lead to the wrong goods
being brought and delivered. This is wasteful and can lead to problems with
production.
c. Staff poor internal communication leads to misunderstandings amongst
staff. This leads to problems with the quality of work and also can lead to
mistakes being made. Workers therefore become less efficient.
d. Motivation poor communication often leads to demotivated staff. For
example workers become frustrated and demotivated if they do not
understand what they have to do. They become demotivated if they know the
quality of their work is poor. I there were better communications workers
would be likely to feel more motivated.

Ms Sarah

Communication revision questions

1. Outline the four features necessary for communication to be effective (4)
2. Explain the difference between internal and external communication (4)
3. List two methods that can be used for written communication (2)
4. Which method of communication would you use if you wanted to: (4)
i. Give an instruction to a large number of people.
ii. Explain a detailed plan to a few other people.
iii. Obtain a very quick reply to your message to another member of staff.
iv. Inform all staff about health and safety regulations.
5. In each of the cases in question 4, briefly explain the reasons for your choice (8)
Case Study
Internal communications in your organisation are very poor. Messages are either not
being received or not being acted upon. As manager of communications you have
been asked to write a report to the Chief Executive. He wants you in your report to
answer some key questions.
1. Define barriers to communication (2)
2. Outline 2 barriers to communication that could exist in an organisation (4)
3. Give advice on how you could remove barriers to communication for the
business. (6)

Ms Sarah

Exchange Rates and Multi-National

Organisations (Chapter 25 pg. 372
375, pg. 380 381)
Exchange Rates
An exchange rate is the price of buying a foreign currency. It tells you how much of
the foreign currency you will get for every dh you spend or how many dh you will
get if you use a foreign currency.
What are imports and exports?

Imports = this is the purchase of a good or service from a foreign business.

Exports = this is the sale of a good or service to a foreign business or
customer.

How do we calculate exchange rates?

What is the impact of exchange rates on businesses?

2

A fall (depreciation) in the value of the dh - The positives

A fall in the value of the dirham is good news for some UAE Businesses.
A firm exporting goods will get more foreign customers as their goods will
become cheaper.

Ms Sarah

Foreign goods become more expensive as well which means that businesses
in the UAE who are competing against foreign businesses will see their
goods become cheaper and more competitive.

A fall (depreciation) in the value of the dh - the negatives

A fall in the value of the dirham can be bad news for some UAE Businesses
though.
Businesses that use or sell foreign goods will see the cost of them increase.
This may means they have to increase the cost of their products or get less
profit.

An increase (appreciation) in the value of the dh - the positives

An increase in the value of the dirham can be good news for some UAE
Businesses.
Businesses that buy goods from other countries will find them cheaper as
they will get more foreign currency for their dirhams.

An increase (appreciation) in the value of the dh - the negatives

An increase in the value of the dirham can be bad news for some UAE
Businesses though.
If they sell goods to other countries then they may find that their goods
become more expensive and foreign customers dont want to buy them.
This could mean that they lose profit and customers.

Growth of multi-nationals

Ms Sarah

Advantages
Jobs will be created which reduces
unemployment
New investment in buildings and
machinery
Increases output in the country
Can increase exports as some of
the goods made by the multinational may be sold in other
countries
They pay taxes to the government

Disadvantages
Often the jobs created are
unskilled jobs
Local firms may be forced out of
business
Profits are often sent back to the
multi-nationals home country
They use up scarce resources and
non-renewable resources

Exchange Rates and Multi-National

Businesses revision questions
1

What is meant by the term exchange rate? (2)

Explain the difference between currency appreciation and currency depreciation.

(4)

How will a currency appreciating affect a firm exporting its goods to other
countries? (2)

How will a currency depreciating affect a firm importing goods from other
countries (2)
Ms Sarah

Explain two reasons why a businesses want to become multi-nationals? (4)

Discuss three possible effects on a country of a multinational fast food company

setting up in its country. (6)

Case Study

Should we allow the XYZ Corporation to set up a factory in an overseas

country?
About the business The XYZ Corporation is applying for planning permission to
build a factory in an overseas country. The factory is expected to be very profitable.
One thousand new unskilled jobs will be created for factory workers. Many of the
goods made could be sold abroad. Some of the supplies for the factory will come
from your country.
About your country In the overseas country unemployment is high, especially
amongst skilled workers. The government cannot afford any new building projects.
There are several local competitors producing goods similar to XYZ. Import levels
are very high. Land for new buildings is very limited. New developments would have
to be built in beautiful countryside.

1. List three groups in the overseas country who would benefit from allowing the
XYZ Corporation to build the factory. Explain your answers. (6)
2. List three groups in the overseas country who may lose from the building of
the factory. Explain your answers. (6)
3. Would you advise the government of the overseas country to allow a new
factory to be built? Explain your answer by using your knowledge and
evaluating all of the evidence. (8)

Facts about Paper 1

Remember there are 2 papers that you will
need to complete:
Time: 1hr 45minutes
Short answer questions and
structured/data response questions

Facts about Paper 2

Time: 1 hour 45 minutes

Based on an unseen case study this
means all the questions will relate back
to the business in the case study.
The paper in total is worth 100 marks

Ms Sarah

based on short questions

The paper is worth 100 marks and
this is split over 5 questions with each
question being worth 20 marks in
total.
Each question will have x2 2mark qs,
x1 4mark qs, x2 6mark 1qs

this is split over 5 questions with each

question being worth 20 marks in total.
Each question has two parts part a is
worth 8 marks and part b is worth 12
marks.
You should spend around 20 minutes on
each question (a and b) this leaves 5
minutes reading time if the case study at
the start (though make sure you do go
back to it throughout the exam.

Grade Descriptions
A grade candidate
Knowledge and
understanding
An excellent ability to
identify detailed facts,
conventions and
techniques in relation to
the content of the
syllabus;
A thorough ability to
define the concepts and
ideas of the syllabus.
Application

A thorough ability to
apply knowledge and
understanding, using
terms, concepts, theories
and methods effectively
to address business
problems and issues;
A sound ability to form
conclusions from this
information and to
demonstrate these
conclusions clearly and
logically.
Analysis
An excellent ability to
classify and comment on
information presented in
various forms;
An excellent ability to
distinguish between
evidence and opinion.
Evaluation

C grade candidate
Knowledge and
understanding
A sound ability to identify
detailed facts,
conventions and
techniques in relation to
the content of the
syllabus;
A sound ability to define
the concepts and ideas of
the syllabus.
Application
An ability to apply
knowledge and
understanding, using
terms, concepts, theories
and methods
appropriately to address
problems and issues;
An ability to draw
conclusions, and to
present these in a clear
manner.
Analysis
A good ability to use and
comment on information
presented in various
forms;
A sound ability to
distinguish between
evidence and opinion.
Evaluation
An ability to evaluate and

F grade candidate
Knowledge and
understanding
some ability to identify
specific facts,
conventions or
techniques in relation to
the content of the
syllabus;
Some familiarity with
definitions of the central
concepts and ideas of the
syllabus.
Application
A rudimentary ability to
apply knowledge and
understanding, using
terms, concepts, theories
and methods
appropriately to address
problems and issues.
Analysis
Some ability to classify
and present data in a
simple way and some
ability to select relevant
information from a set of
data;
Some ability to
distinguish between
evidence and opinion.
Evaluation
A limited ability to
understand implications

Ms Sarah

A sound ability to make

clear, reasoned
judgments and
communicate them in an
accurate and logical
manner.

make reasoned
judgments.

and make
recommendations.

Ms Sarah