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Business > 1.What Is Business > Flashcards

1.What Is Business Flashcards

1
Q

Name the 4 functional areas of a business

A

1) Human Resources
2) Marketing
3) Operations
4) Finance

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2
Q

Name the 6 main objectives of any business

A 
C - cashflow 
P - profit
I - increase market share 
G - growth
S - social / ethical
S - survival
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3
Q

Define an aim

A

An overall business target

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4
Q

Define an objective

A

Smaller targets in order to reach an overall business aim

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5
Q

Name 5 external factors which will impact business objectives

A

1) Competition
2) Demand
3) Environment
4) Government
5) Economy

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6
Q

What does SMART stand for

A 
Specific
Measurable
Achievable
Realistic
Timely
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7
Q

What is a public sector business

A

An organisation ran by the government on behalf of citizens

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8
Q

What is a private sector business

A

Businesses that are owned by shareholders and individuals

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9
Q

Define sole trader

A

A single individual who owns a business

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10
Q

What tax do sole traders pay?

What kind of liability do they have?

A
  • Income tax

* Unlimited liability

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11
Q

Name 2 pros and 2 cons of being a sole trader

A

+ Owner keeps all profits
+ You are your own boss

  • No one to help make decisions and run business if you’re ill
  • Unlimited liability
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12
Q

Define a partnership

A

Business owned by 2 or more partners

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13
Q

What tax do partnerships pay?
What kind of liability do they have?
How is it set up ?

A
  • Income tax
  • Unlimited liability
  • Sign deed of partnership
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14
Q

Name 2 pros and 2 cons of being a partnership

A

+ Balance out skills
+ Unlimited liability

  • Conflict
  • Owners share profits
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15
Q

What is a sleeping partner?

A

Someone who invests in a business but does not partake in any running of the business. They have limited liability

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16
Q

Define private limited company (LTD)

A

Business with shareholders who are friend and family

17
Q

What tax do PLCs pay?
What kind of liability do they have?
How is it set up ?

A
  • Corporation tax
  • Limited liability
  • Incorporation process, AGM, directors
18
Q

Name 3 pros and 2 cons of a private limited company (LTD)

A

+ Limited liability
+ Legal identity
+ Bigger potential capital

  • Accounts are public
  • Shareholders want dividends and a say
19
Q

Define public limited company (PLC)

A

Business that can sell shares on the stock exchange

20
Q

What tax do LTDs pay?
What kind of liability do they have?
How is it set up ?

A
  • Corporation tax
  • Limited liability
  • Incorporation process, AGM, directors
21
Q

Name 2 pros and 2 cons of being a public limited company (PLC)

A

+ Huge capital
+ Limited liability

  • Details accounts are public
  • Risk of takeover
22
Q

Name 3 reasons shareholders invest in a business

A

1) Dividends
2) Share price might increase and they can sell
3) Say in the business (AGM)

23
Q

Name 5 things share price is affected by

A

1) Business performance
2) Takeover
3) Economic conditions
4) Trends
5) Launch of new product

24
Q

Define market capitalisation

A

The market value of a company’s issued share capital

25
Q

How do you calculate market capitalisation

A

No of shares x Current price of shares

26
Q

What is dividend cover

A

How well dividends are covered by profits

27
Q

Name the 3 types of dividend cover

A

1) All profits paid out to shareholders
2) Half profits paid out
3) 1/3 profits paid out

28
Q

Define floatations

A

The process of offering a company shares for sale on the stock market for the first time

29
Q

Name 3 pros and 3 cons of flotation

A

+ Raises capital
+ Motivates Management with share partnership schemes
+ Enhance status

  • Public scrutiny
  • Takeover
  • Might not Increase marketability of the company
30
Q

Define privatisation

A

Selling a state owned assets to the private sector

31
Q

3 benefits of privatisation

A

1) Improved efficiency
2) Government will raise revenue from the sale
3) Long term view consider (not concerned w election and publicity)

32
Q

3 disadvantages of privatisation

A

1) Service gets worse as profit is the main objective
2) The public pays more for the services
3) The public can’t go to the council to complain, they have less of a voice

33
Q

Define demand

A

How many of a good or service we are willing and able to buy at a given price

34
Q

What is GDP

A

Gross Domestic Profit- The value of all goods and services sold in an economy in a given period of time (quarter/annually)

35
Q

Positive economic growth leads to 3 things …

A

1) Good job security
2) Higher real incomes
3) Higher employment

36
Q

Tight economic conditions leads to greater competition. To stay ahead a business can do 3 things …

A

1) Price cut
2) USP
3) Research and Development

37
Q

Define interest rates

A

The amount charged by a bank per year for lending money

Business (8 decks)

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