Key term
Edexcel A-Level Business 9BS0
Meeting Customer Needs
Marketing Mix and Strategy
Managing People
Entrepreneurs and Leaders
Financial Planning
Managing Finance
Resource Management
External Influences
Business Objectives and Strategy
Decision-Making Techniques
Influences on Business Decisions
Assessing Competitiveness
Globalisation
Global Markets and Business Expansion
Global Marketing
Global Industries and Companies
Assessing Competitiveness
- 3 subtopics
- 24 things to know
- Paper 2 and Paper 3
What Assessing Competitiveness covers
Assessing competitiveness is the fifth section of Theme 3. It covers how a business is read from the outside: the two financial statements it publishes, the ratios calculated from them, and the human resource measures that show how well it is using its people.
Where it is assessed
Paper 2 and Paper 3
Theme 3, examined on Business activities, decisions and strategy, then the pre-released synoptic paper.
Check the Pearson Edexcel specification ↗The 3 subtopics
Each one has its own page.
- Interpretation of financial statementsThe statement of comprehensive income and the statement of financial position, the accounting equation, and what each line in them represents.Open →
- Ratio analysisGearing and return on capital employed, how each is calculated, what a high or low value suggests, and the decisions the ratios inform.Open →
- Human resourcesLabour productivity, labour turnover and retention, absenteeism, and the financial and non-financial strategies used to improve them.Open →
What you need to know
Answer each one before you reveal it.
Your recallNot started
Numbers
How are operating profit and net profit found?
Key term
What does the statement of financial position show, and what is the accounting equation?
Key term
Why must the accounting equation balance, and what are non-current assets?
Key term
What are trade payables, cash equivalents and short-term borrowings?
Key term
What is the relationship between net assets and equity?
Key term
What is the key difference between the statement of comprehensive income and the statement of financial position in terms of time?
Numbers
What does the gearing ratio measure, and how is it calculated?
Numbers
What is return on capital employed, and what does low gearing show?
Evaluation
What decisions do gearing and ROCE inform?
Numbers
Give three examples of qualitative factors that ratios do not account for.
Numbers
How is labour productivity calculated?
Numbers
How does labour productivity affect unit costs, and what does high turnover cost?
Evaluation
Which financial reward strategies raise productivity?
Key term
Define empowerment in the context of human resource management.
Key term
What conditions are necessary for empowerment to be effective?
Numbers
State the net-assets formula.
Numbers
State the working-capital formula.
Numbers
State the labour-turnover formula.
Numbers
State the employee-retention formula.
Numbers
State the absenteeism-rate formula.
Numbers
State the gearing-ratio formula.
Numbers
State the ROCE formula.
Numbers
State the labour-productivity formula.
Take Assessing Competitiveness further
The same content, four other ways.
Commonly confused
Pairs that lose marks when they are blurred together.
Liquidity vs Profitability
Liquidity: ability to meet short-term financial obligations. Profitability: ability to generate a surplus from business activity.
Dismissal vs Redundancy
Dismissal: employment ended because of conduct or capability. Redundancy: a role removed because the job is no longer required.
Questions from this topic
Each one with the model answer underneath.
- 1
What does the statement of comprehensive income show?
Model answer
It shows a business's revenues, costs, and resulting profit or loss over a specific accounting period.
- 2
What does revenue (also called turnover or sales) represent in the statement of comprehensive income?
Model answer
Revenue represents the total income generated from the sale of goods or services during the accounting period.
- 3
What is cost of sales in the statement of comprehensive income?
Model answer
Cost of sales is the direct costs attributable to producing the goods or services sold, such as raw materials and direct labour.
- 4
What are operating expenses in the statement of comprehensive income?
Model answer
Operating expenses are the indirect costs of running the business, such as rent, utilities, salaries, and marketing costs.
- 5
How is interest shown in the statement of comprehensive income?
Model answer
Interest represents the cost of borrowing (interest payable) or income from investments (interest receivable), deducted or added after operating profit.
- 6
What does tax represent in the statement of comprehensive income?
Model answer
Tax represents the corporation tax liability calculated on the business's taxable profits for the period.
What is inside Levo
Six ways to work the same material.
Assessing Competitiveness revision questions
- What does Assessing Competitiveness cover in Edexcel A-Level Business?
- 3 subtopics: interpretation of financial statements, ratio analysis and human resources. Each one has its own page with questions and model answers.
- How is Assessing Competitiveness organised?
- By the Edexcel 9BS0 specification, subtopic by subtopic, so it matches the order you are taught it in.
Every question in Assessing Competitiveness, on a schedule.
Attempt a question from memory, write the correct version, then attempt it again. Levo records the jump between your first attempt and your last, and brings each question back on the day you are due to forget it.
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