Slides 13 Flashcards
Define the term ‘business’
An organization that provides goods or services to consumers for profit.
What is ‘economics’?
The study of how individuals and societies allocate scarce resources.
List the four types of economic systems.
- Traditional
- Command
- Market
- Mixed
Describe the role of supply in a free-enterprise system.
Supply refers to the amount of a good or service that producers are willing to sell at various prices.
What factors contribute to the health of the economy?
Indicators such as GDP, unemployment rates, inflation rates, and consumer confidence.
What is the role of an entrepreneur in the economy?
To innovate and create new products or services, driving economic growth.
What is a stakeholder?
Any individual or group that has an interest in the success of a corporation.
Identify the types of stakeholders.
- Market stakeholders
- Nonmarket stakeholders
- Internal stakeholders
- External stakeholders
What is stakeholder analysis?
A process of identifying stakeholders and assessing their interests and power.
What is the purpose of a modern corporation?
To generate profit for its shareholders while considering the interests of stakeholders.
Explain corporate governance.
The system by which corporations are directed and controlled, including the roles of the board of directors.
What are the major functions of management?
- Planning
- Organizing
- Leading
- Controlling
List the three levels of management.
- Top-level management
- Middle-level management
- Lower-level management
What skills do managers need to be successful?
- Technical skills
- Human skills
- Conceptual skills
What is the importance of organizational culture?
It shapes the behavior, values, and practices of an organization.
Fill in the blank: Total costs (TC) = _______ + FC
[VC]
What does EBITDA stand for?
Earnings Before Interests, Taxes, Depreciations, and Amortizations.
What is the break-even point (BEP)?
The level of sales at which total revenues equal total costs.
True or False: Corporations only have market stakeholders.
False
What is the Cash Conversion Cycle formula?
Debtor days + Inventory days - Creditor days.
Define ‘profitability ratios’.
Ratios that measure a company’s ability to generate profit relative to its revenue, assets, or equity.
What is the formula for Contribution Margin (CM%)?
CM% = (Contribution Per Unit / Revenue per unit) * 100.
