amazon.co.ukFinance and Accounts
A-Level Business Studies revision: Finance and Accounts. Learning objectives, key points, worked examples and practice questions across AQA, Edexcel, OCR, WJEC and CCEA.
📌 Key Points
Key Fact: Income statement: revenue, COGS, gross profit, expenses, operating profit, profit for year
Key Fact: Balance sheet: non-current assets, current assets, current liabilities, non-current liabilities, equity
Key Fact: Cash flow: operating, investing, financing; free cash flow
Key Fact: Ratios: Gross/Net margin, ROCE, Current/Acid test, Inventory/Payables/Receivables days, Gearing (debt/equity)
Key Fact: Break-even: FC / (P - VC); Margin of safety = actual - BE; Target profit = (FC + target) / contribution
Key Fact: Finance: internal (retained profit, asset sale); external: debt (loans, bonds, overdraft), equity (shares, venture capital)
Key Fact: Investment: Payback (time), ARR (avg profit/avg investment), NPV (discounted CF), IRR (discount rate for NPV=0)
Key Fact: Budgets: plan, coordinate, control; Zero-based (justify all), Incremental (last year +/-); Variance: adverse/favourable
🎯 Learning Objectives
- Interpret financial statements: income statement, balance sheet, cash flow statement
- Calculate and interpret profitability, liquidity, efficiency, gearing ratios
- Analyse break-even: contribution, margin of safety, target profit
- Understand sources of finance: internal (retained profit) vs external (debt, equity)
- Evaluate investment appraisal: payback, ARR, NPV, IRR
- Understand budgets: purpose, types (zero-based, incremental), variance analysis
💡 Worked Example
Exam-Style Question
Question: FC=GBP 50,000, VC=GBP 5/unit, P=GBP 15. Find break-even, margin of safety at 12,000 units, units for GBP 30,000 profit
Model Answer:
Contribution = 15-5=10. BE = 50,000/10 = 5,000 units. MoS = 12,000 - 5,000 = 7,000 units (58%). Target: (50,000+30,000)/10 = 8,000 units
❓ Practice Questions
Questions:
- Calculate gross/net margin from income statement
- Interpret current ratio 1.5 vs 0.8
- NPV: GBP 100k initial, GBP 30k/yr 5yrs, 10% discount
- Compare debt vs equity finance
- Calculate adverse variance: budget GBP 20k, actual GBP 25k
🎬 Video Resources
- Finance and Accounts - Overview -- YouTube Search
- Finance and Accounts - Exam Questions -- YouTube Search
📄 Past Papers & Exam Resources
🔗 Further Reading & Resources
- Physics & Maths Tutor - Finance and Accounts -- Free notes, worksheets, and past paper questions by topic
- Dr Frost Maths - Finance and Accounts -- Free resources, slides, and interactive questions
- BBC Bitesize - Finance and Accounts -- BBC Bitesize revision resources