First

Question 1

What is a mission statement?

Answer 1

Tells you about the businesses intentions and overall purpose.

Question 2

What are business objectives?

Answer 2

Stepping stones to enable them to achieve their mission statement

Question 3

What are Functional objectives?

Answer 3

Objectives of each department within a business (e.g marketing, finance)

Question 4

What are corporate objectives?

Answer 4

Goals of the business as a whole

Question 5

Another name for Functional objectives?

Answer 5

Departmental objectives

Question 6

Why do business make objectives?

Answer 6

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.

Question 7

What does SMART stand for?

Answer 7

Specific, measurable, agreed, realistic, timely

Question 8

What kind of objectives do non profit organisations set?

Answer 8

Social or ethical objectives.

Question 9

Formula for revenue

Answer 9

Selling price X Quantity sold

Question 10

What are fixed costs? Give examples.

Answer 10

Costs that don’t change with output. E.g rent

Question 11

What are variable costs? Give examples.

Answer 11

Costs that change with output e.g wages, raw materials.

Question 12

What are semi variable costs? Give examples.

Answer 12

Have both variable and fix costs such as telephone bills. You pay telephone bills monthly and ontop pay for extra services.

Question 13

Formula for Total cost

Answer 13

Variable costs + Fixed costs.

Question 14

Formula for profit?

Answer 14

Total revenue minus total costs.

Question 15

What is the money given to shareholders called?

Answer 15

Dividends.

Question 16

What is the difference between Public and Private sector?

Answer 16

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.

Question 17

What are social enterprises?

Answer 17

Businesses that reinvest back into the local community.

Question 18

What is Unlimited liabilities and what kind of business experience unlimited liability?

Answer 18

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.

Question 19

What is Limited liability and what kind of businesses experience it?

Answer 19

Owners only lose the money they invested. E.g PLC, LTD.

Question 20

What are sole traders?

Answer 20

Sole traders is an individual trading in his/ her own name. They are self employed.

Question 21

Give 3 advantages of being a sole trader.

Answer 21

Freedom of decisions and working times, keep all the profit, Less files and rules to regulate to, own boss.

Question 22

Give 5 disadvantages of being a sole trader?

Answer 22

Risk is all on you, often need to work long hours, less expertise, finance is limited, Unlimited liability.

Question 23

4 Advantages of an LTD.

Answer 23

Don’t have share price quoted on the stock exchanges, no minimum share capital required, more control, Limited liability.

Question 24

2 Disadvantages of LTD

Answer 24

Less financial access than PLC, Can’t raise as much money from market capitalisation.

Question 25

2 Advantages of PLC

Answer 25

More financial access e.g banks, gain money from market capitalisation, have to pay dividends

Question 26

3 Disadvantages of PLC

Answer 26

Financial data are published, have to have a minimum of 50,000 in share capital, may lose control.

Question 27

What is ordinary share capital?

Answer 27

Capital gained from selling shares.

Question 28

What is Market capitalisation?

Answer 28

Total value of all of the ordinary shares issued by the company

Question 29

Formula for market capitalisation?

Answer 29

Number of issues shared X Current share price.