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TOPIC 1

profit margin-difference between revenue and the cost for each item sold

mission-aims of long term intentions

mission statement-statement of aims to motivate employees and convince stakeholders of commitment

business objectives-goals that must be achieved to realise aims of organisation

Specific

Measurable

Achievable

Realisitic

Time bound

common business objectives

Profit-effective marketing, increase prices, decrease until costs

growth-increasing market share, mergers, increasing sales volume

survival-minimum amount of profit needed to cover costs

cash flow-money flowing in and out of a business

ethics-achieve ethical objectives

price-amount paid by customer for a product

total revenue=quantity sold x price per unit

profit=amount left over after deducting revenue from total costs

total revenue-total costs

fixed costs-do not change directly with output

variable costs-change directly with output produced

unlimited liability- unincorporated, owners liable for debt

limited liability-incorporated, business liable for debt

private limited-limited liability, run by individuals not on stock exchange

public limited-unlimited liability, stock exchange run b government

soletrader-unlimited

not for profit-charity, run for benefit of customers

mutual-john lewis, run for benefit or employees

dividend-paid by company to shareholders out of profits earned

market capitalisation-how much company is worth no of shares issues x price per share

demand- how much customers are willing and able to buy at a given price

cost- price incurred by a business when making a product

interest rates-cost of borrowing money or the reward of saving money