All five topics
Everything in Unit 2, spec point by spec point
Open any topic straight in the app.
How businesses plan and fund their activities — the business plan, internal and external sources of finance, forms of business from sole trader to plc, and unlimited and limited liability.
- aPlanningBusiness plan · using a plan to obtain finance · limits of a plan
- bInternal FinanceOwner's capital · personal savings · retained profit · sale of assets
- cExternal FinanceBusiness angels · crowd funding · loans and overdrafts · share capital · venture capital
- dForms of BusinessSole trader · partnership · private limited company · franchising · stock market flotation
- eLiabilityUnlimited liability · limited liability · finance appropriate to each form
Planning and controlling business finances — sales, revenue and costs, sales forecasting, break-even analysis, cash-flow forecasts and budgets.
- aSales, Revenue and CostsSales volume · sales revenue · fixed and variable costs · average costs
- bSales ForecastingConsumer trends · economic variables · actions of competitors · difficulties of sales forecasting
- cBreak-EvenContribution per unit · break-even point · margin of safety · break-even chart
- dCash FlowConstructing a cash-flow forecast · interpreting a cash-flow forecast · limitations of cash-flow forecasts
- eBudgetsHistorical figures · zero-based budgets · variance analysis · difficulties of budgeting
How businesses measure and manage profit — gross and operating profit, the statement of comprehensive income, profitability, the statement of financial position and working capital, liquidity and the causes of business failure.
- aProfitGross profit · operating profit · profit for the year · statement of comprehensive income
- bProfitabilityGross profit margin · operating profit margin · profit for the year margin · improving profitability
- cCash and the Statement of Financial PositionProfit is not cash · statement of financial position · working capital
- dLiquidityCurrent ratio · acid test ratio · extending supplier credit · factoring
- eBusiness FailureOvertrading · poor inventory control · poor marketing · exchange rates and interest rates
How businesses manage production and operations — production methods, productivity and efficiency, capacity utilisation, inventory control and lean production, and quality management.
- aProduction, Productivity and EfficiencyJob and batch production · flow and cell production · measuring productivity · efficiency · capital-intensive
- bCapacity UtilisationMeasuring capacity utilisation · under-utilisation · over-utilisation
- cInventory ControlBuffer inventory · just in time · waste minimisation · lean production
- dQuality ManagementQuality control · quality assurance · quality circles · total quality management · Kaizen
The external environment that shapes business decisions — inflation, exchange rates, interest rates, taxation and government spending, the business cycle, legislation and the competitive environment.
- aInflation and Exchange RatesRate of inflation · responding to inflation · exchange rates · currency movement
- bInterest Rates, Taxation and Government SpendingInterest rates · responding to a rate rise · taxation · government spending
- cThe Business CycleBusiness cycle · which businesses the cycle hits hardest · planning through the cycle
- dLegislationConsumer protection · employee protection · health and safety · competition policy · intellectual property
- eThe Competitive EnvironmentCompetitor numbers · competitor size · competitor behaviour · how a small business competes
Unit overview
What you need to know for WBS12
- Cash flow vs profit
- A business can be profitable yet still run out of cash. Understanding the difference between profit and cash flow is essential for every finance question.
- Ratios tell the story
- Profitability and liquidity ratios are the language of finance. Learn to calculate, interpret and evaluate them in context — not just in isolation.
- Operations drive efficiency
- Lean production, capacity utilisation and quality management are how businesses reduce costs and improve competitiveness. Link to real examples in your answers.
- External factors constrain choices
- Interest rates, exchange rates, legislation and the competitive environment all shape business decisions. Weigh how far each one, and the stage of the business cycle, changes the decision in front of you.
Exam paper info
WBS12 at a glance
Assessment details
- Exam paper
- WBS12
- Duration
- 2 hours
- Total marks
- 80 marks
- % of A-Level
- 25%
- Question types
- 4820
- Data response
- Yes — Section A
- Essay questions
- Section C — 1 compulsory 20-mark essay
Keep going
Continue revising
- Unit 1: Marketing and PeopleWBS11 · Customer needs, the market, marketing mix, managing people
- Unit 3: Business Decisions and StrategyWBS13 · Objectives, growth, decision-making, competitiveness, change
- Written PracticeAI-marked exam answers with instant feedback
- Past PapersPractise with real Unit 1 papers and mark schemes