Unit A2 1 Making Business Decisions

A look at investment appraisal including working examples of payback, avergae rate of return (ARR) and Net Present Value (NPV). Advantages and disadvantages of each method is provided.

A look at how to approach decision making.

Definition of what is ratio analysis. Types of ratios. Who uses ratios? Performaance ratios i.e. ROCE, Net Profit or Gross Profit. Liquidity Ratios o.e. Current Ratio or Acid Test Ratio. Gearing ratio. Shareholder Ratios. How to evaluate a company's ratios.

A look at investment decision making including payback with its advantages and disadvantages.

A look at what is culture, culture within a company and how to change culture via a groupthink.

A look at the different between cash and profit. The importance of cash. Cash Flow Forecasting. How to work out working capital. Methods of Solving Working Capital. The Working Capital Cycle.

Key company accounts definitions and the purpose of an income statement and statement of financial position.

A look at organic and inorganic (internal and external) growth. Advantages and disadvantages are provided.

A look at all the stakeholders in a business, their objectives, how conflict may arise and types of conflict between different groups i.e. between customers and shareholders. A look at strategic evaluation and its advatnages and disadvantages.

What is conflict and the methods to resolve it: avoidance, accommodating, forcing, compromise and problem solving.