Spec coverage
Every spec point, and what actually teaches it
The real numbered content list from the official Pearson specification, each point matched to the lesson that covers it. Click through to a lesson from its spec point below, or rate how confident you feel — saved in this browser so it’s there next time you come back. Any point with no matching lesson is flagged, not hidden.
20 spec points · 20 covered
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2.3.1 — Planning a business and raising finance
- 2.3.1.1
Planning
- a) Content of a business plan.
- b) Relevance and uses of a business plan.
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- 2.3.1.2
Internal finance
- a) Owner's capital: personal savings.
- b) Retained profit.
- c) Sale of assets.
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- 2.3.1.3
External finance
- a) Sources of finance and their suitability for different circumstances: family and friends; banks; peer-to-peer funding; business angels; crowd funding; other businesses.
- b) Methods of finance and their suitability for different circumstances: loans; share capital; venture capital; overdrafts; leasing; trade credit; grants.
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- 2.3.1.4
Forms of business
- a) Sole trader, partnership and private limited company (Ltd).
- b) Franchising, social enterprise, lifestyle businesses, online businesses.
- c) Growth to public limited companies (plc) and stock market flotation.
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- 2.3.1.5
Liability
- a) Implications of limited and unlimited liability, including advantages and disadvantages.
- b) Finance appropriate for limited and unlimited liability businesses.
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2.3.2 — Financial planning
- 2.3.2.1
Sales, revenue and costs
- a) Calculation of sales volume and sales revenue.
- b) Calculation of fixed, variable costs, total costs and average costs.
- c) Ways of improving sales volumes and sales revenues.
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- 2.3.2.2
Sales forecasting
- a) Purpose of sales forecasts.
- b) Factors affecting sales forecasts: consumer trends; economic variables; actions of competitors.
- c) Difficulties of sales forecasting.
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- 2.3.2.3
Break-even
- a) Contribution: selling price − variable cost per unit.
- b) Break-even point: total fixed costs + total variable costs = total revenue.
- c) Using contribution to calculate the break-even point.
- d) Margin of safety.
- e) Interpretation of break-even charts.
- f) Limitations of break-even analysis.
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- 2.3.2.4
Cash flow
- a) Construction and interpretation of simple cash-flow forecasts.
- b) Use and limitations of cash-flow forecasts.
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- 2.3.2.5
Budgets
- a) Purposes of budgets.
- b) Types of budget: based on historical figures; zero based.
- c) Variance analysis.
- d) Difficulties of budgeting.
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2.3.3 — Managing finance
- 2.3.3.1
Profit
- a) Calculation of: gross profit; operating profit; profit for the year (net profit).
- b) Ways to increase profits.
- c) Statement of comprehensive income (profit and loss account): measuring profitability: calculation of gross profit margin, operating profit margin, and profit for the year (net profit) margin; ways to improve profitability.
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- 2.3.3.2
Liquidity
- a) Distinction between profit and cash.
- b) Statement of financial position (balance sheet): measuring liquidity: calculating current ratio and acid test ratio; ways to improve liquidity, including assets, supplier credit terms, factoring, inventory JIT.
- c) Working capital and its management: the importance of cash.
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- 2.3.3.3
Business failure
- a) Internal causes of business failure: poor management of cash flow; overestimation of sales; overtrading; poor inventory control; poor marketing; poor quality.
- b) External causes of business failure: market conditions; competition; economic; exchange rates; interest rates; government regulations; supplier problems; natural phenomena.
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2.3.4 — Resource management
- 2.3.4.1
Production, productivity and efficiency
- a) Methods of production: job; batch; flow; cell.
- b) Productivity: output per unit of input per time period; factors influencing productivity; link between productivity and competitiveness; ways to improve productivity.
- c) Efficiency: production at minimum average cost; factors influencing efficiency; ways to improve efficiency.
- d) The distinction between labour- and capital-intensive production.
- e) Competitive advantage from short product lead-in times.
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- 2.3.4.2
Capacity utilisation
- a) Capacity utilisation: current output (divided by) maximum possible output (× 100).
- b) Implications of under- and over-utilisation of capacity.
- c) Ways of improving capacity utilisation (under and over utilisation).
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- 2.3.4.3
Inventory control
- a) Interpretation of inventory control diagram.
- b) Buffer inventory.
- c) Implications of poor inventory control.
- d) Just in time (JIT).
- e) Waste minimisation.
- f) Competitive advantage from lean production.
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- 2.3.4.4
Quality management
- a) Quality: control; assurance; circles.
- b) Total Quality Management (TQM).
- c) Continuous improvement (Kaizen).
- d) Competitive advantage from quality management.
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2.3.5 — External influences
- 2.3.5.1
Economic influences
- a) The effect on businesses of, and how they can best respond to, changes in: the rate of inflation; exchange rates (appreciation, depreciation); interest rates; taxation and government spending; the business cycle.
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- 2.3.5.2
Legislation
- a) The effects on businesses of: consumer protection; employee protection; environmental protection; competition policy; health and safety; intellectual property rights (copyright, patents and trademarks).
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- 2.3.5.3
The competitive environment
- a) The effects on businesses of competition in terms of competitor: numbers; size; behaviour.
- b) Ways for a small business to compete in a competitive market.
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