Making Financial Decisions | Edexcel GCSE Business (1BS0)
Making Financial Decisions
- 32 questions
- 2 subtopics
- Paper 2
- Paper 2
Making Financial Decisions is examined in Paper 2, Building a business (Theme 2).
It covers profit, profit margins and ARR and understanding business performance.
Sample questions from Making Financial Decisions
Answer each one closed book first, then open the answer.
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Profit, profit margins and ARR
What does the gross profit margin measure, and how is it calculated?
Show the answer
The gross profit margin shows the percentage of sales revenue left after cost of sales. Gross profit margin (%) = gross profit ÷ sales revenue × 100. -
Profit, profit margins and ARR
How can a business improve its net profit margin?
Show the answer
A business can cut operating expenses such as rent, or reduce its borrowing to pay less interest. Higher prices or cheaper supplies also lift the margin by raising gross profit. -
Understanding business performance
What is marketing data?
Show the answer
Marketing data is information about how customers respond to a business's products, prices and promotions. Market research results, sales by product and customer feedback are examples. -
Understanding business performance
How can financial data inform a decision to expand?
Show the answer
Profit figures show whether the business can afford expansion from retained profit. Cash flow forecasts show whether the business could meet loan repayments.
The 2 subtopics
One subtopic is one session. Work down the list.
| Subtopic | What it covers | Questions |
|---|---|---|
| Profit, profit margins and ARR | Gross and net profit, cost of sales, gross and net profit margins, the average rate of return with worked calculations, and what the figures tell a business. | 16 |
| Understanding business performance | Using graphs and quantitative data, financial, marketing and market data, worked percentage changes and averages, and the limitations of financial information for decisions. | 16 |
How the guide is worked
Answering a question from memory stores it far better than reading the answer again. The guide runs that as a fixed procedure on one subtopic at a time, about twenty minutes a session.
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Step 1 · Closed book
Cover the answers. Work through one subtopic and write down what you can. Leave blanks where you have nothing.
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Step 2 · Open book
Go back to the top. Read each printed answer and write it out in full, including the ones you had right.
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Step 3 · Closed book again
Same questions, same order, from memory. The gap between pass one and pass three is the session result.
Read the full method, the return schedule and the research behind it.
Nearby topics
Edexcel GCSE Business Active Recall Guide
Every topic, not just this one. 672 questions with their answers.