Business A-Level
retrenchment
What retrenchment means in Business A-Level, as defined for AQA.
Definitions of retrenchment
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Reference: AQA
A deliberate strategy to reduce scale, perhaps by selling a division, which can raise cash, improve liquidity and increase return on capital employed by shedding underperforming assets.
Cutting back, which can leave capacity utilisation so low that fixed costs per unit soar and brings redundancies.
Topics that use retrenchment
- Assessing a change in scale (AQA A-Level)
Related terms
- capacity utilisation
- Economies of scale
- external growth
- Franchising models
- gearing
- integration cost
- interest cover
- Methods of external growth
Using retrenchment in the exam
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