Role of business Flashcards
What is a business
- An organisation that attempts to satisfy the needs and wants of the community by providing goods and services.
- The aim of any business is to make a profit.
What is a good?
Physical products that are sold that are tangible, objectively quantified e.g. a gilgamesh figure
What is a service?
Services are intangible, they are subjectively valued. e.g. a haircut
What is Value adding?
An IPO diagram(input - process - output)
This process or “transformation” is adding value to the good service e.g. baking a cake
What are the 6 roles of business?
- production of goods and services
- profit
- employment and incomes
- choice and innovation
- entrepreneurship and risk
- wealth and quality of life
What is profit and how is it calculated?
The amount of money left when the expenses are subtracted from income, within a defines period of time.
Revenue - expenses = profit
What is Revenue/income?
Amount of money generated through sales
What are expenses?
How much it costs to produce the goods/services and bring them to the market
What is employment?
Refers to the state of being employed or having a job, wherein an individual is engaged in work or services for an employer in exchange for compensation.
What is income?
The money or financial gain received by an individual or a business during a specific period, often measured in the form of wages, salaries, profits, interest, rents, or other forms of earnings.
What is wage?
A specific form of compensation paid to an employee on an hourly, daily, or piece-rate basis, typically associated with jobs that involve manual or hourly work
What is a salary?
A fixed regular payment or compensation paid to an employee on a monthly, semi-monthly, or annual basis, regardless of the actual number of hours worked.
What is a shareholder?
Individuals or entities that own shares or stocks in a company. By holding shares, they become partial owners and are entitled to a portion of the company’s profits, as well as certain voting rights in major corporate decisions.
What is a dividend?
A distribution of profits by a corporation to its shareholders. It is typically paid out in the form of cash, additional shares, or other assets. Dividends are a way for shareholders to receive a return on their investment in the company.
What is an entrepreneur?
A person who sets up a business or businesses, taking on financial risks in the hope of profit.
