Business 1 Flashcards
Ethical
Morally correct behaviour e.g treating workers well
Market Capitalisation
The value of a company as measures by the stock market. Market Capitalisation = Numbers of shares x Share Price
Private Limited Company
A limited liability business where shares are not freely available
What’s a business
An organisation that exists to provide goods and services on a commercial basis to customers
Variable costs
Costs that change directly with output. They will increase by a set amount each time a new unit is made
Fair Trade
Buying raw materials at a price that allows reasonable living standards for the suppliers and often above at the market price
Non profit organisations
An incorporated organisation which exists for the interests of its members or as a charity, so there are no shareholders only trustees benefit financially e.g Kimbolton School
Profit formula
Profit = Total revenue - total costs
Share
A certificate showing you own part ownership of a company. The share entitles the holder to receive dividends and voting rights to decide how the firm is ran.
Revenue
The income generated by sales of a product
The transformation process
Describes what happens inside the business. This is where value is added to inputs to create outputs
Dividends
A portion of the profits given to shareholders
Company growth
The increase over time of the revenue of a business. Economic growth refers to the increase in size of the whole economy
Limited liability
Shareholders can only lose the money invested in the company not their entire personal wealth if the business collapses with debts
Private Sector
An organisation that is not government run or owned
Profit
Is the difference between a firms revenues from its trading activities and its total costs. It is a reward for risk and a return on capital invested
Public Sector Organisations
Government owned organisations
Revenue formula
Revenue = price x quantity sold
Shareholder
Part-owners of a business who can vote at the AGM and receive dividends
Fixed Costs
Costs that do not change directly with level of output
Public Limited Companies
Large firms whose shares can be bought and sold by the general public on the stock exchange. The owners appoint managers to run the business
Sole Trader
An individual who owns and runs a business. The individual operates under unlimited liability so are personally responsible for all debts
CELL
Capital, Enterprise, Land and Labour
Added Value Formula
Added Value = selling price - the cost of bought in materials/services
Total Costs Formula
Total costs = fix costs + variable costs
