Business Studies Topic 1 Flashcards
What is the role of a business
profit, employment, incomes, choice, innovation, entrepreneurship and risk, wealth and quality of life
What are the ways to classify a business
Legal structure, size, industry sector and geographical spread
What is geographical spread
Local, national and global
What are the industry sectors
Primary, secondary, tertiary, quaternary and quinary
What legal structures have limited liability
Private and public companies
What legal structures have unlimited liability
Sole trader and partnership
What legal structures are incorporated
Private and public companies
What are the external influences on a business
Economic, financial, geographic, social, legal, political, institutional, technological, competitive situation and markets
What are the different levels of government
Local, state and federal
Different market concentrations are
Monopoly, oligopoly, perfect competition and monopolistic competition
What are the internal influences on a business
Products, location, management, resources and business culture
Who are stakeholders in a business
Managers, environment, customers, employees, owners and public
What are the stages of the business life cycle
Establishment, growth, maturity and post maturity
What are the three options for a business in the post maturity stage
Steady state, decline, renewal
What are the main reasons for business failure
Failing sales and failing profits
What is voluntary cessation
Voluntary cessation is when an owner retires, resigns or when the owner abandons the business.
What is involuntary cessation
Involuntary cessation is when the owner is forced to close down the business. An example of involuntary cessation is bankruptcy.
What is a creditor
A creditor is an individual or business that is owed money because they have provided a good or service or loaned money to another entity.
Define bankruptcy
Bankruptcy is when a business doesn’t have the funds for their debts
Define voluntary administration
Voluntary administration is where a person comes into a business to try and revive their debts and try to save them from bankruptcy.
What is liquidation
Liquidation can be regarded as equivalent to bankruptcy. It results in the end of a business. A liquidator is appointed to sell all of the company’s assets to creditors and the rest of the money is paid to the owners of the business.
