Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Business > Theme 2 > Flashcards

Theme 2 Flashcards

1
Q

Definition of a good:

A

a products- anything which is capable of satisfying customer needs - tangible items eg. a car

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Defintion of a service

A

A service is an act that a business person carries out for you in exchange for money - intangible - eg. hair dresser

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Whats the equation for profit:

A

Revenue (sales) - costs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Defintion of owners capital:

A

This is money invested by the owner in the business, this may have come from their own personal savings

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Defintion of rerained profit:

A

retained=to keep

This is profit from a previous year that is saved and could be used to reinvest into the business

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Defintion of an asset:

A

This is an item that the business owns that could be sold to raise cash eg. a van/machine

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

notes on owners capital:

A
  • the owner may have savings or a redundancy payout to start up a business
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Explain retained profit and give an A+DA

A
  • After a year or more businesses are able to re-invest into the business
  • advantage = no interest to pay
  • disadvantage = once its gone its gone
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Name 6 sources of finance:

A
  • family and friends
  • banks
  • peer to peer funding
  • business angels
  • crowd funding
  • other businesses
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Name 7 methods of finance

A
  • loans
  • share capital
  • venture capital
  • overdrafts
  • leasing
  • trade credits
  • grants
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Look at sheet for explanations of methods and sources of finance

A
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Name 2 internal sources of finance

A
  • retained profit
  • sales of assets
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Name 3 external sources of finance

A
  • bank loan
  • overdraft
  • share capital
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

what are the consequences of being bankrupt:

A
  • no credit
    -cannot pay debts
  • no mobile phone contract
  • cannot buy house
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What 3 things do business angels give you

A
  • advice
  • money
  • contacts
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What does crowd funding do:

A
  • donate - don’t get money back
  • lend - get money back with interest
    -invest - in business and exchange for shares
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Give a example of debt factoring:

A

Emma lends Haaris £5,000 but he refuses to pay it back. Emma fails to take him to court and Haaris runs away. Emma pays £4,000 debt to debt factoring company who are professionals and find Haaris. He is forced to give debt factoring company at least £5,000. He makes a profit of £1,000.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Definition of unlimited liability:

A

if the business has debts the owners are liable for the full amount and may need to sell their own assets to cover payments. They are unprotected.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Definition of limited liability:

A

if the business has debts the owners are only liable for the amount of their original investment. They are protected.

20
Q

What does LTD stand for

A

Private limited company (smaller businesses)

21
Q

What does PLC stand for

A

public limited company (larger businesses)

22
Q

Whats a description and example of a sole trader:

A
  • a person who is the exclusive owner of a business, entitled to keep all profits after tax has been paid but liable for all losses.
  • eg. a window cleaner
23
Q

What are the benefits and problems of a sole trader:

A

benefits:
- benefit from success financially
- full control
- easy to set up

problems:
- face burden of failure
- assets may be sold - unprotected
- unlimited liability

24
Q

Whats a description and example of a partnership:

A
  • a legal agreement between two or more entities that determines shared ownership and operation of a business.

-eg. Dentist/vets

25
Q

Whats the benefits and problems of a partnership?

A

benefits
- shared responsibilities
- support when needed
- additional skills
- more capital inject more finance - more people

problems
- sharing profit
- different goals and priorities
- loss of control
- unlimited liability

26
Q

Whats a description and example of private limited companies:

A
  • a company that is a legal entity in its own right, separate from the identity of its owners and has special status in law.
  • eg. suttles/high street businesses
27
Q

What are the benefits and problems of private limited companies:

A

benefits:
- access to capital - money
- protected
- banks more willing to lend
- limited liability

problems:
- time consuming to set up
- public disclosure

28
Q

Whats the definition and examples for public limited companies:

A
  • a type of public company that is allowed to offer its shares to the public and is listed on a stock exchange

-eg. coca-cola/ kellogs

29
Q

What are the benefits and problems of public limited companies:

A

benefits:
- raising capital
- economies of scale
- growth opportunities
- limited liability

problems:
- possibility of take-over - hostile take over
- company value falls if share prices fall

30
Q

Where do you go to become limited

A

companies house

31
Q

What can you do if you are public limited company?

A

sell shares

32
Q

Definition of a business plan:

A

a document that describes a businesses aims and objectives and how they can be achieved.

33
Q

Why is a business plan needed?

A
  • any provider of finance (bank, business angel) will expect to see a carefully prepared, logical plan.
  • attract external finance to help business grow
  • helps ensure entrepreneur has carefully considered potential problems
  • has quantitative aims targets to aim for
34
Q

What are the 7 main sections a business plan should include:

A
  1. Executive summary
  2. The product/service
  3. The market
  4. Marketing plan
  5. Operational plan
  6. Financial plan
  7. Conclusion
35
Q

What is a dividend

A

a share of profit

36
Q

Give an example of a leasing company:

A

A construction company leasing a crane

37
Q

what does b2c stand for?

A

business 2 consumer
eg. sainsburys to you

38
Q

What does b2b stand for?

A

business 2 business
eg. fanta to tesco

39
Q

What is the definition for cash flow forecast?

A

to show the expected income and expenditure of a business over the coming year

40
Q

Whats the calculation for sales revenue?

A

price (each item) x quantity

41
Q

definition of opening balance

A

cash available at start of each period

42
Q

definition of closing balance

A

cash available at end of each period that can be carried over next period

43
Q

What is the equation for:
- net cash flow =
- closing balance =
- opening balance =

A
  • inflow-outflow
  • opening balance + net cash flow
  • closing balance of previous period
44
Q

What are the uses of cash flow forecasts?

A
  • control and monitor cash in and out of business
  • show business owner where likely cash surplus and shortages are so they can arrange suitable finance
  • make comparisons between the predicted inflows and outflows and what actually happened
45
Q

What are the limitations of cash flow forecasts?

A
  • over inflate the inflows to make business look better on paper to attract finance/impress a supplier
  • predictions cannot take into account weather problems, a supplier closing, any other event that cannot be foreseen
  • mistakes - may be inaccurate

Business (3 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions