BTEC Business Unit 3: Financial Forecasting for Business

Learner Name: | Centre Number: 23168 | BTEC Business | | Learner No: | |

UNIT NUMBER AND TITLE: | Unit 3: Financial Forecasting for Business | ISSUE DATE: | | HAND IN DATE: | | RESUBMISSION DATE: | | ASSESSOR: | |

Aims
The aim of this unit is to enable you to understand the financial aspects of running a business. You will do this through looking at the key concepts used by businesses to manage their money, and forecast their finances for the future.

Money is at the heart of business. It is likely to be the main reason why a business was created and for it continuing to trade. This unit looks at the financial aspects of running a business.

Work covered
You will: * Know about costs, revenue and profit in a business organisation * Be able to prepare a break even analysis * Be able to create a cash flow forecast

Know about costs, revenue and profit in a business organisation
Business costs: costs incurred at start up; operating costs (fixed, indirect, variable, direct costs, total costs)
Revenue: sources of revenue e.g. sales, leasing interest; calculating total revenue (unit sales price x number of units sold)
Calculating gross and net profit: revenue (income) minus costs (expenditure), cost of sales, expenses (operating costs); maximising profits (increasing revenue

Be able to prepare a break-even analysis
Break even: balancing costs or expenditure with revenues or income; areas of profit and loss; margin of safety; methods of presenting graphically

Be able to create a cash flow forecast
Cash inflow: capital; sales; loans; regular and irregular inflows; timing of inflows
Cash outflows: purchases; loan repayments; wages; regular and irregular outflows; timing of outflows
Cash balances: opening balance; closing balance;