Specification Content

Page 1

Understanding the nature and purpose of business

Why businesses exist - business objectives including; profit, growth, survivial, cash flow, social and ethical objectives

The relationship between mission and objectives

Common business objectives

Why businesses set objectives

The measurement and importance of profit - including; revenue (turnover and sales), fixed costs, variable costs and total costs

Page 2

Understanding different business forms

Reasons for choosing different forms of business and for changing business forms - different forms include; sole traders, private limited companies, public limited companies, private sector organisations, public sector organisations, non-profit organisations such as charities and mutuals. Issues include; unlimited and limited liability, share capital, market capitalisation and dividends

The role of shareholders and why they invest

Influences on share price and the significance of share price changes

Effects of ownership on mission, objectives, decisions and performance

Page 3

Understanding that businesses operate within an external environment

How the external environment can affect costs and demand - factors influencing include; Political, Economic, Social, Technical, Legal, Environmental, Competition, market condition, incomes, interest rates and demographic factors