LIKELY

Created by

Lucia Kelly

Cards (28)

Confidence interval 
the percentage probability that an estimated range of possible values in fact includes the actual value being estimated
Why are confidence intervals so useful in business?
Businesses benefit from the use of statistics in estimating or predicting future events
A confidence interval helps a business evaluate the reliability of a particular estimate
Because no estimate can be 100% reliable, businesses need to know how confident they should be in their estimates and whether or not to act on them
Market capitalisation 
total market value of the issued share capital of the company
Inventory 
raw materials, work in progress, finished goods
Why Do Businesses Hold Inventory?
To enable production to take place
To satisfy customer demand
As a precaution against delays from suppliers
To enable efficient production
To allow a business to meet seasonal changes in demand
To provide a buffer between different parts of a production process
What are the Main Influences on the Quantity of Inventory Held by a Business?
The need to satisfy customer demandThe need to manage working capitalRisk of inventory losing value
What are the Costs to a Business of Holding Inventories? 
Cost of storage Interest costs Obsolescence risk
Return on Capital Employed
a business to compare operating profit with the total capital employed by the business.
Current Ratio 
a business to explore its liquidity by comparing current assets with current liabilities.
Gearing 
the proportion of long-term funding which comes from debt.
Culture 
values of the business
How is culture reflected?
The responsiveness of communication
The methods used for communication
How staff call each other (e.g. first name)
The speed with which decisions are taken
The number of layers in the management hierarchy
Signs of a strong organisational culture include:
Staff understand and respond to culture
Little need for policies and procedures
Consistent behaviour
Culture is embedded
Evidence that points to a weak organisational culture include:
Little alignment with business values
Inconsistent behaviour
A need for extensive bureaucracy & procedures
Confidence interval 
thepercentage probabilitythat an estimated range of possible values in fact includes the actual value being estimated
Why are confidence intervals so useful in business?
Businesses benefit from the use of statistics in estimating or predicting future events
A confidence interval helps a business evaluate the reliability of a particular estimate
Because no estimate can be 100% reliable, businesses need to know how confident they should be in their estimates and whether or not to act on them
Market capitalisation 
total market value of the issued share capital of the company
Inventory 
raw materials, work in progress, finished goods
Why Do Businesses Hold Inventory?
To enable production to take place
To satisfy customer demand
As a precaution against delays from suppliers
To enable efficient production
To allow a business to meet seasonal changes in demand
To provide a buffer between different parts of a production process
What are the Main Influences on the Quantity of Inventory Held by a Business?
The need to satisfy customer demand The need to manage working capital Risk of inventory losing value
What are the Costs to a Business of Holding Inventories? 
Cost of storage Interest costs Obsolescence risk
Return on Capital Employed
a business to compare operating profit with the total capital employed by the business.
Current Ratio 
a business to explore its liquidity by comparing current assets with current liabilities.
Gearing 
the proportion of long-term funding which comes from debt.
Culture 
values of the business
How is culture reflected?
The responsiveness of communication
The methods used for communication
How staff call each other (e.g. first name)
The speed with which decisions are taken
The number of layers in the management hierarchy
Signs of a strong organisational culture include:
Staff understand and respond to culture
Little need for policies and procedures
Consistent behaviour
Culture is embedded
Evidence that points to a weak organisational culture include:
Little alignment with business values
Inconsistent behaviour
A need for extensive bureaucracy & procedures