3.7 Flashcards
mission statement
the purpose of the business.
what makes a good mission statement
clear sense of purpose. excites, inspires motivates. easy to remember.
criticisms of mission statement
disconnect between mission statement and what the business actually does. people think its just marketing. maybe to vague.
strategy definition
long term plan. designed to achieve corporate objectives. commit most of businesses recourses.
tactic definition
tends to be short term to respond to opportunities and threats. influences by functional objectives. commit less recourses.
what is SWOT analysis
helps a business see its competitive strength
what does swot mean
strengths, weaknesses, opportunities, threats
+ of SWOT
logical structure. encourages analysis of external environment.
- of swot
too often lacks focus. can quickly become out of date.
ROCE meaning
return of capital employed
ROCE advantages
evaluate overall performance. provides target for individual projects. benchmark performance.
liquidity ratios
assess whether a business has sufficient cash or current assets to pay its debts
income statement
measures business performance over a given period of time it compares the incomes to the expenditures.
balance sheet
a snap shot of business assets. what is owed or owned.
cash flow statement
shows the business generated and disposed of cash and liquid funds during the period under review
