1.What Is Business Flashcards
Name the 4 functional areas of a business
1) Human Resources
2) Marketing
3) Operations
4) Finance
Name the 6 main objectives of any business
C - cashflow P - profit I - increase market share G - growth S - social / ethical S - survival
Define an aim
An overall business target
Define an objective
Smaller targets in order to reach an overall business aim
Name 5 external factors which will impact business objectives
1) Competition
2) Demand
3) Environment
4) Government
5) Economy
What does SMART stand for
Specific Measurable Achievable Realistic Timely
What is a public sector business
An organisation ran by the government on behalf of citizens
What is a private sector business
Businesses that are owned by shareholders and individuals
Define sole trader
A single individual who owns a business
What tax do sole traders pay?
What kind of liability do they have?
- Income tax
* Unlimited liability
Name 2 pros and 2 cons of being a sole trader
+ Owner keeps all profits
+ You are your own boss
- No one to help make decisions and run business if you’re ill
- Unlimited liability
Define a partnership
Business owned by 2 or more partners
What tax do partnerships pay?
What kind of liability do they have?
How is it set up ?
- Income tax
- Unlimited liability
- Sign deed of partnership
Name 2 pros and 2 cons of being a partnership
+ Balance out skills
+ Unlimited liability
- Conflict
- Owners share profits
What is a sleeping partner?
Someone who invests in a business but does not partake in any running of the business. They have limited liability
Define private limited company (LTD)
Business with shareholders who are friend and family
What tax do PLCs pay?
What kind of liability do they have?
How is it set up ?
- Corporation tax
- Limited liability
- Incorporation process, AGM, directors
Name 3 pros and 2 cons of a private limited company (LTD)
+ Limited liability
+ Legal identity
+ Bigger potential capital
- Accounts are public
- Shareholders want dividends and a say
Define public limited company (PLC)
Business that can sell shares on the stock exchange
What tax do LTDs pay?
What kind of liability do they have?
How is it set up ?
- Corporation tax
- Limited liability
- Incorporation process, AGM, directors
Name 2 pros and 2 cons of being a public limited company (PLC)
+ Huge capital
+ Limited liability
- Details accounts are public
- Risk of takeover
Name 3 reasons shareholders invest in a business
1) Dividends
2) Share price might increase and they can sell
3) Say in the business (AGM)
Name 5 things share price is affected by
1) Business performance
2) Takeover
3) Economic conditions
4) Trends
5) Launch of new product
Define market capitalisation
The market value of a company’s issued share capital
