First Flashcards
What is a mission statement?
Tells you about the businesses intentions and overall purpose.
What are business objectives?
Stepping stones to enable them to achieve their mission statement
What are Functional objectives?
Objectives of each department within a business (e.g marketing, finance)
What are corporate objectives?
Goals of the business as a whole
Another name for Functional objectives?
Departmental objectives
Why do business make objectives?
Make sure that everyone is working towards the same goal and also is motivating for employees as they know what they are looking to achieve.
What does SMART stand for?
Specific, measurable, agreed, realistic, timely
What kind of objectives do non profit organisations set?
Social or ethical objectives.
Formula for revenue
Selling price X Quantity sold
What are fixed costs? Give examples.
Costs that don’t change with output. E.g rent
What are variable costs? Give examples.
Costs that change with output e.g wages, raw materials.
What are semi variable costs? Give examples.
Have both variable and fix costs such as telephone bills. You pay telephone bills monthly and ontop pay for extra services.
Formula for Total cost
Variable costs + Fixed costs.
Formula for profit?
Total revenue minus total costs.
What is the money given to shareholders called?
Dividends.
What is the difference between Public and Private sector?
Public sector are owned and run by the Government. They aim to improve overall welfare of the public. Private sector or owned and ran by private individuals and most aim to maximise profits.
What are social enterprises?
Businesses that reinvest back into the local community.
What is Unlimited liabilities and what kind of business experience unlimited liability?
The business and the business are seen as one under the law. Business debts become personal debts therefore can be forced to sell personal assets such as their house. Sole traders and partnerships experience unlimited liability.
What is Limited liability and what kind of businesses experience it?
Owners only lose the money they invested. E.g PLC, LTD.
What are sole traders?
Sole traders is an individual trading in his/ her own name. They are self employed.
Give 3 advantages of being a sole trader.
Freedom of decisions and working times, keep all the profit, Less files and rules to regulate to, own boss.
Give 5 disadvantages of being a sole trader?
Risk is all on you, often need to work long hours, less expertise, finance is limited, Unlimited liability.
4 Advantages of an LTD.
Don’t have share price quoted on the stock exchanges, no minimum share capital required, more control, Limited liability.
2 Disadvantages of LTD
Less financial access than PLC, Can’t raise as much money from market capitalisation.
2 Advantages of PLC
More financial access e.g banks, gain money from market capitalisation, have to pay dividends
3 Disadvantages of PLC
Financial data are published, have to have a minimum of 50,000 in share capital, may lose control.
What is ordinary share capital?
Capital gained from selling shares.
What is Market capitalisation?
Total value of all of the ordinary shares issued by the company
Formula for market capitalisation?
Number of issues shared X Current share price.