3.1.1 Flashcards
Business objectives
Profit maximisation
Cash flow
Survival
Growth
Social and ethical
Importance of profit
Source of finance
Reward for taking risks
Motivate employees
Sign of financial stability
Suppliers more willing to trust
Indicator of success
Importance of profit
Source of finance
Reward for taking risks
Motivate employees
Sign of financial stability
Suppliers more willing to trust
Indicator of success
SMART objectives
Specific
Measurable
Agreed
Realistic
Time frame
Mission statement
Qualitative description about organisation so stakeholders understand its intent, focus and aims
Formula for profit
Total revenue- total costs
Formula for profit
Total revenue- total costs
Fixed costs
Costs that do not vary with output eg rent
Variable costs
Costs that vary with output eg raw materials
Total costs formula
Fixed costs + variable costs
Revenue formula
Selling price per unit x number of units sold
Variable costs formula
Variable cost per unit x units produced
Average costs
total costs of
production divided by the level of
production or output to give the cost
of producing a single unit of output
