Fichas
What Is A Business? Things you need to know
Fichas del conjunto (33)
- 1Why Does A Business Exist?- Creates employment (increases GDP)
- Creates wealth (taxes)
- Creates new products
-Enhances the country's reputation - 2Business Categories According To Economic Sectors- Primary- agriculture, mining, farming
- Secondary- manufacturing, construction
-Tertiary- hotels, transport, health care
Can operate in more than one sector - 3Define Mission StatementA qualitative statement of an organisation's aims which describe the general purpose of the company.
- 4SMARTMission objectives should be:
Smart
Measurable
Achievable
Realistic
Time - 5Common Objectives- Profits and profit maximization (smaller family owned businesses, achieve other targets, satisfy shareholders-dividends)
- Growth (can exploit market position for higher profits, higher dividends, better salaries and job security)
- Survival (important in recessions, intense competition and times of crisis e.g. hostile takeover) - 6Benefits Of Setting Objectives- Know what you are doing
- Organisation
- Motivates employees
- Measures progress
- Review success of the business plan - 7Profit EquationTotal revenue - Total costs
- 8Total CostsFixed costs- Variable costs
- Can help decide on product price - 9RevenueQuantity sold x Average selling price
- Reduction of price usually equals more sales - 10Total Variable Costs EquationVariable costs per unit x No. units sold
- 11Define ProfitabilityBeing able to make a product.
- 12Private Sector Busiensses- Owned by shareholders/ private individuals
- Not owned by the government, local authorities or state organisations
- E.g. soletraders - 13Sole TradersAn individual establishes and operates their own business e.g. plumber.
- 14Benefits Of Being A Sole Trader- Easy to set up (don't have to register with government agencys if all profits are declared to HMRC)
- Freedom- be your own boss, make your own decisions, self motivated
- You decide what happens to the profit - 15Drawbacks Of Being A Sole Trader- Unlimited liability
- No shared responsibilities
- Difficult holidays and sick days
- Hard to raise finances - 16Define Unlimited LiabilityIf you can't pay the businesses debts then you use your personal belongings to pay it off e.g. house.
- 17Public Limited Companies (PLC) Legal Status- Incorporated
- Accounts are public - 18Benefits Of Being A PLC- Limited liability
- Easy to raise large sums of capital
- Publicity is low cost- in papers
- Takeover-can buy other companies by offering shares to other company's shareholders
- Increase capital by selling shares on the stock exchange - 19Drawbacks Of Being A PLC- Shareholders own the company
- Chance of a take over
- Difficult to pursue objectives - 20Define Market Capitalisation- The value of the company based on share prices and the number of outstanding stocks.
- Measures the size of a PLC
Current share price x No. outstanding shares - 21Define Limited LiabilityIn the event of financial difficulties personal belongings are safe.
- 22Private Limited Companies (LTD) Legal StatusIncorporated
- 23Benefits Of Being A LTD- Limited liability
- Quick set up
- Separate legal identity
- Only taxed on profits - 24Drawbacks Of Being A LTD- Publish accounts
- Expensive set up
- Less power - 25Benefits Of Profit- More customers
- More likely to gain investors, cheaper to raise finance
- May be bought by a larger rival
- Have confidence of suppliers so could make delayed payments - 26Define AimsLong term plans which a businesses objective are derived
- Set by senior employees
- Relate to the whole business
- From this they set quantifiable objectives - 27Define ObjectivesMedium to long term goals to coordinate the business.
- 28Companies- Owned by shareholders
- Limited liability
- Shareholders benefit from dividends and company value
- Businesses pay auditors to check accounts annually
- E.g. Private or Public limited
- Must have a memorandum of association and a article of association - 29Role of Shareholders- Influence decision making
- Buy shares
- Shares are worth voting rights, more shares is more voting rights which means more company influence - 30Influences On Share Prices- Company performance (perform well and share prices are anticipated to rise)
- Businesses environment in which they trade (good economic conditions means investors are more confident, more finance) - 31Significance Of Share PriceIt doesn't have a direct impact on the companies immediate financial position.
- Falling- poor performance, hard to raise capital, vulnerable to takeover.
- Rising- reflects well on the management team, good job, receive bonuses, easier to raise capital, potential shareholders are more willing to buy assets and banks are more willing to offer loans - 32Positive Effects Of The External Environment- Change in taste means a rise in demand
- Competition leaves the market
- Consumer numbers increase
- Interest falls so it's cheaper to borrow money
- Steadily rising income- higher demands for products as people can afford more - 33Negative Effects Of The External Environment- Consumers want environmentally friendly product which costs more
- New businesses enter the market so more competition
- Over supplied market so prices are lowered to compete- unemployment, lower consumer income, less spending
Información
- Descripción
- El usuario ha eliminado su información de asignaturas Fichas sobre What Is A Business? Things you need to know, creado por Usuario eliminado el 17/10/2016.
- Creado por
- Usuario eliminado · oct 2016
- Actualizado
- 18 oct 2016
- Visitas
- 82
- Etiquetas
- Historial
-
- Creado por Freya Coombes · 1 mar 2016
- Copiado por Tony Watson · 17 oct 2016
- Valoración