Chapter 1.1 - For-profit And Not-for-profit Flashcards
What is the objective of a for-profit business?
The objective of a for-profit business is to make a profit. A profit is earning more revenue then expenses.
What is the objective of a not-for-profit business?
The objective of a not-for-profit is to achieve a set of social objectives that the founders have created the business for. Profit is made but all funds go towards their social objective.
What are the three sizes of businesses and how many employees are in each?
The three sizes are small, medium and large. Small businesses are between 1-19 employees. Medium businesses are between 20-199 employees. Large businesses are 200+ employees.
Who are the owners for large scale businesses?
Owners of large scale businesses are shareholders (people who own shares in their company).
What are shareholders?
A shareholder is a person who owns or holds shares in a company. There a two types of shareholders - a public shareholder where a person can buy into a business whenever. The other type is a private shareholder where you have to be invited to own a share in the business.
How are profits distributed in a for-profit business?
Profits are distributed to shareholders by what is known as dividends. If the business is run by one owner, all the profit goes to the owner.
What are the two type of organisations?
For-profit and not-for-profit.
