Edexcel GCSE Business 1.3 Flashcards
What are the two types of business aims and objectives
Financial and Non-Financial
Name at least 2 financial aims and objectives for a business
Survival, Profit, Sales, Market Share and/or financial security
Name at least 2 non-financial aims and objective for a business
Social objectives, personal satisfaction, challenge, independence and control
Is a business aim a long or short term target?
Long term. It can also be referred to as the goal of a business
Is a business objective a long or short term target?
An objective is more short term. It’s generally more specific and helps businesses achieve their aims.
What is Revenue?
Also referred to as sales revenue or turnover. It is the total amount of income made from selling a product or service.
What is a fixed cost?
They are those costs that do not change in line with changes in output. An example would be e.g. rent/mortgage
What is a variable cost?
They are those costs that change directly with changes in output. An example would be e.g. raw materials
How do you calculate Total Costs?
Fixed costs + Variable costs
What are Total Costs?
Total costs are all costs add together that a business incurs in making a product or providing a service.
What is Profit?
Profit is made when the revenue received exceeds the Total Costs.
What is a Loss?
A Loss is when a business has Total Costs that are greater than the Revenue - it’s called a Loss.
What is an Interest Rate?
When a business borrows money from the bank, the bank will charge them an Interest Rate. This is expressed as a percentage per annum.
What is the formula used to calculate the interest rate charged on a loan?
(Total Repayment - Borrowed Amount) / Borrowed Amount x 100
What is the formula to calculate Profit?
Profit = Revenue - Total Costs
