Tuesday, 16 October 2018

CDP Sessions 2018 - Feedback

Session 1

Session 2

Session 3  Recent research

Monday, 15 October 2018

What does a Profit and Loss Account tell us

Learning Aim C: Understanding how business measures success and identify areas for improvement

1. Start by looking at the slides here and taking some notes
2. Then use this blog page to make more notes and make sure that you have all the key definitions and equations recorded in your notes.  I've underlined them to make it easier to see

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 - the formula will not be given in the exam
  • GROSS Profit = Revenue - Cost of Sales
  • Be able to 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
  • Net Profit = Gross Profit - expenditure 
  • Explain the impact of positive and negative net profit on businesses
This video might help so click here

10/10 Key terms test on financial statements - profit and loss accounts
  1. Financial statements - a summary of financial records of the business.  These include profit an loss accounts and balance sheets.
  2. Profit and loss account - this financial statement summarises if a business made a loss or a profit over the financial period (usually a year) 
  3. Sales Revenue - the value of goods sold.  Number of goods sold x selling price
  4. Cost of Sales - The cost to the business of the goods sold
  5. Gross Profit - the difference between the sales revenue and the cost of the goods sold.  Sales revenue - cost of sales 
  6. Gross Profit Margin - the percentage of sales revenue that is gross profit.  The gorss profit % margin = gross profit /  sales revenue x 100
  7. Overheads - expenses of the business that are not normally directly part of the production process (e.g. rent and management salaries) 
  8. Net Profit - the difference between sales revenue and total costs of the business.  Net profit = gross profit - overheads
  9. Net Profit Margin - the percentage of sales revenue that is net profit.  Net profit margin % = (net profit / sales revenue) x 100 
  10. Shareholders - the owners of the company who invest in share capital in order to share a proportion of the profit in the form of a dividend.
Exam board expectations
Candidates should be able to identify the various components of a profit and loss account.
Candidates should be able to make judgements of the performance of the business through interpretation of the information contained in simple versions of the profit and loss accounts and the application of gross and net profit margins.
Candidates will be given the relevant formulae for ratios as part of the examination paper

Purpose of financial statements
Profit and loss accounts are just one of the two financial statements that a business uses to show the stakeholders what is happening in the business:
  • Managers need to know if a profit is being made
  • Shareholders or the owners would not know whether to invest more into the business
  • Banks would be uncertain whether to lend more or to demand repayment of earlier loans
  • The government would not know how much tax the business should pay
  • Workers will be uncertain about jobs and whether the business can afford to pay higher wages
The main financial records that every business needs to calculate include:
  1. The number of products sold, the value and what still need to be paid for
  2. The goods and services bought
  3. Equipment and other assets purchased
  4. Wages and other labour costs
The profit and loss account contains five important pieces of information:
  • Sales revenue - this increases when the number of units sold or the unit price increases
  • Cost of sales - this is the bought in value of the goods plus direct labour costs needed to make the goods
  • Gross Profit - this can be increased by increasing sales revenue or by reducing the costs of sales
  • Expenses or overheads - these include the fixed costs of the business
  • Net Profit - this is a very important profit calculation as it shows how successful the managers were at turning a profit out of the sales once all the costs were deducted from the revenue.

Distinction thinking

In the news Unlike most top football clubs, Arsenal FC is a Public Limited Company.  This means that its accounts are published and anyone can see how well its doing.  Arsenal is owned by Arsenal Holdings plc, with the main shareholder being Danny Fiszman, a Swiss-resident diamond dealer with 24.1%.  The club has two major trading arms football and property and is one of the few Premiership clubs that makes a profit. Posting £36.7m profit in the financial year ending 2008. ( Chelsea lost £76m in the same period and Man U £58m and Liverpool £22m in the same period.  The Profit and Loss account lets all shareholders major and minor and all stakeholders know how well a company is doing. Arsenal revenue was up £23m on the previous period to £223m due to selling more TV and broadcasting rights.  Match day tickets from supporters and season ticket holders was also up £94.6m 

Group activity Punch 'arsenal holdings plc' into a search engine and you will see a list of sites that describe the company, what its worth and how it trades, who its directors are etc. Choose a few sites and see what info they provide and say which you thought was best.  

Still not got it - teach yourself P&L accounts Click on the powepoint here to tell you more. 

The trading account sales revenue ;less the cost of sales (opening stock + purchases - closing stock) this gives the GROSS PROFIT

The profit and loss account gross profit less other expenses such as rent, wages, transport, power, fuel, equipment to give the NET PROFIT

The appropriation account net profit - tax - dividend = retained profit 

Discussion The law requires companies to produce profit and loss accounts to certain standards and at regular intervals.  Why do you think that such accounts have to be made public? Do you think that it is fair that company income should be revealed to everyone in this way?

Web-based activity Look at the other clubs in the football Premiership and find out which are publicly quoted.  Look at the profit and loss accounts for each (go to the 'corporate' or 'investors' part of the website) and decide which is the most profitable.  Make sure that you follow the rules for making comparisons.  If you are not interested in football, you could compare businesses in another sector, fashion for example, or technology.

Typical exam questions on understanding profit & loss accounts
  1. What is a public limited company?
  2. What is meant by 'sales revenue'?
  3. Name three other sources of income, besides sales revenue?
  4. Define Gross Profit
  5. Name the three parts of the profit and loss account.
  6. Explain what happens to retained profit.
  7. Outline the unusual items included in the cost of sales.
  8. Explain what is meant by 'dividends'
  9. Give one major limitation to the usefulness of profit and loss accounts
Calculating total costs click here
Calculating profit click here

Nine mark question
By practicing these nine mark questions you are developing skills and confidence and will access the other 50% of the marks in the Paper 1 & Paper 2 exams

Friday, 12 October 2018

Week 2 Creating the board of Directors

Dear Year 12

here are the outline topics for discussion at today's meeting:

  1. Welcome and Agenda
  2. Introduction to Regional Manager SE from YE Bracey Parish
  3. Decisions form last meeting. Did we manage to ID 100 Problems to create one solution
  4. Deciding company structure - Profit or social enterprise
  5. Business purpose - for profit or social enterprise
  6. Organisational structure of Job roles 
  7. Director Job Roles  Nomination proposed and seconded
  8. Election of Directors
  9. Opening the bank account
  10. Agree next steps and a company name
  11. Review of skills demonstrated

Tuesday, 9 October 2018

Topic 5 Budgeting

Dear Year 12

Homework on cash flow forecasting due in today so that I can complete an accurate report on your attitude to learning, independent learning and quality of work.

Todays topic is on budgeting.

Here is todays powerpoint for the lesson

here are the class notes and the first activity for those that like to read up on a topic and test there understanding

And the classroom activity for lesson 2 this morning will be on planning a very special event.

I hope that you find it an enjoyable double lesson and a topic that is clearly understiood by the end of the double lesson

Mr T

Friday, 5 October 2018

Meeting 1 Friday 5th October 2018 3pm -4pm in the Conference Room

Visit the Milestones PDF of things to do

Formal introductions

Interests and hobby's
Potential suited role within the company & letter of application to support
What are you good at / like doing / don't like doing

Ideas on a flip chart

Any common interests to focus on

First weeks challenge - each short list of at least TWO preferred ideas or products 

Look at the United Nations 17 Goals and think of an idea that we can align with one of these initiatives or

Pick a few known businesses in similar industries to the ideas discussed in the meeting and come up with ideas on how they could be better or more niche - Think gap in the market - emerging trends - existing products or services.  We can find out what the market wants using www.answerthepublic.com or

Survey friends and family to find out 100's of problem's  you only need one to build a business:

Create a questionnaire/survey for your target market and ask the following questions in relation to your business industry. Fill in the blanks for 'XYZ'. Collect 100 problems from your target market. 
www.surveymonkey.co.uk is a great tool to collect information)
  1. What would you say are your 3 top problems with XYZ?
  2. What stresses you out with XYZ?
  3. If you could just have a break from something what would that be?
  4. If you find yourself worrying about XYZ, what is it about?
  5. If you could fix one thing with XYZ what would that be?
  6. What do you wish you had more of?
  7. What do you wish you had less of?
  8. As you think about where you want to have or be in XYZ, why don’t you already have it?
  9. If funding wasn’t a problem what would be the first thing you would invest in relation to XYZ?
  10. What do you really want from XYZ?

    Think of other questions you might want to add that may be better suited for your business industry too. 
  11. To gather this information, really think about where your target market is hanging out. (Facebook, Twitter, Instagram, Forums, Events, etc)

oh and don't forget to think of a company name.

The brownies were great.  Who's bringing a sweet treat next week?

Mr T

End of topic test and homework

Dear all

please can you ensure that I have your homework on cashflow for Tuesday

Also this is todays end of topic test on costs and break even for your reports next week

I need this score for the system so when its complete print it out and we can mark it


Mr T

Answers to end of topic test 1 answers here

Thursday, 4 October 2018

P4 Unit 7 European Destinations P4 Factors that have contributed to one develoiping and one decling dsestination in Europe

P4 Approach - you need to REVIEW factors that have contributed to one declining and one developing destination in the European Travel market.
  1. Choose TWO holiday destinations - 1 declining - 1 developing

    Identify factors that have contributed to the decline / growth e.g. POLITICAL FACTORS, ECONOMIC FACTORS, CULTURAL FACTORS, DESIGN, SECURITY, BUTLERS LIFE Cycle
  2. Research current information that will support part 2 above using the reading list below and researching other articles. and the fastest growing destinations in Europe article here
  3. Plan your PODCAST structure APPLYING it to the Butlers Life Cycle model
  4. Record and review your podcast presentation
Reading list to research P4
  • Declining demand from holidays in Europe review
  • What do you thinks going on in Venice
  • A location that has benefited a lt over 40 years from World Heritage status and one that you could say will drive it soon into decline e.g. Dubrovnik and here
  • European Statistics click here
  • Managing tourist destinations - Google books click here
  • Sustainable development in tourism.  How to manage the risks click here
  • From development to decline - click here
  • Travel trends from the office of National Statistics click here
  • We are all going bust beside the seaside article in this is money - Will more EU holiday destinations decline as UK holiday makers choose to holiday in the UK following the terrorist attack in Egypt last week - an alternative view click here

For M3 - You need to ANALYSE reasons for the developing and declining of your TWO selected destination in the European Travel Market.  You could talk about how the sophisticated traveller has become confident at unpack aging the packaged holiday and putting it together themselves or how social media and the non professional experience is attracting more customers e.g. Mollie Bylett and her Where's Mollie blog page My Cornwall Trip Part 1

For D2 you need to JUSTIFY how current factors could impact on the European travel market in the near future.  A typical distinction response might refer to the impact of the credit crunch with less disposable income being available for consumers and investors or the poor exchange rate with the pond and the Euro which could encourage more travel outside of the EU and maybe the appeal of these countries is greater to visitors from the rest od the world.  Looking ahead you may consider the impact of leaving the EU on the two destinations chosen.  You may even consider how the rise ion budget airlines has seen destinations grow but what would happen in the future if these low cost airline routes were withdrawn. Whatever angle you take make sure that you have some evidence fromyour research to back it up.

Hand-out:         101018
Hand in date:  311018