Miss M Al-Saad

Question 1

Why do businesses exist

Answer 1

Business exist for multiple reasons
- To provide goods/services that meet needs & wants of their customers
- to achieve a specific social, ethical or environmental purpose
- To create wealth for owners or other stakeholders in the business

Question 2

What is a mission statement

Answer 2

Mission statements are long term goals that a business strive to achieve
It is a broad statement of why the business exists

Question 3

Benefits of a good mission statement

Answer 3

• it can be used as a marketing tool to attract customers
• it can be used to motivate employees
• it can attract future shareholders
• As a starting goal for a business

Question 4

What are objectives

Answer 4

Objectives are specific, short term goals that business want to achieve/maintain in the business
Objectives should be S.M.A.R.T (Specific, measurable, achievable, realistic & time based)

Question 5

What does S.M.A.R.T mean in a business

Answer 5

Specific
Measurable
Achievable
Realistic
Time based

Question 6

Objectives can be corporate and functional.
What does corporate mean

Answer 6

Corporate objectives are meant for the whole business

Question 7

Objectives can be corporate and functional.
What does functional mean

Answer 7

Functional objectives are based in a specific financial department
They may be HR, Operations, Finance, Marketing

Question 8

What are output levels

Answer 8

Output levels are the number of goods or services produced by a industry, company or economy in a timeframe

Question 9

What are variable costs

Answer 9

Variable costs are things that change almost immediately depending on the levels of output

Question 10

What are fixed costs

Answer 10

Fixed costs are costs that don’t immediately change depending on the output levels in the business

Question 11

Examples of fixed costs

Answer 11

Insurance, Mortgage, Rent, Salaries

Question 12

Examples of variable costs

Answer 12

Raw materials, Packaging supplies, Commissions, Salaries

Question 13

What is capital expenditure

Answer 13

Money spent by a business or organisation on acquiring or maintaining fixed assets

Question 14

What is revenue expenditure

Answer 14

Any money spent in the business to cover short-term expenses

Question 15

Examples of objectives

Answer 15

Specific levels of profit
Specific levels of growth
Specific levels of cash flow
Survival
Social and ethical targets

Question 16

What is revenue

Answer 16

Revenue is the total amount of money a business earns from selling goods or services.