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A Level Business > Topic 1 Continued > Flashcards

Topic 1 Continued Flashcards

1
Q

What are some pros of a private limited company

A

Pay corporate tax which is less than income tax
Easier to get loans from banks as they can view your business
Owners have control as investors are invite only
Don’t have to public all financial info compared to a PLC

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2
Q

What are cons of a private limited company

A

Less opportunities for capital as shareholders are invite only
Registering the business is time consuming which gives competitive disadvantage
There can be conflict of ownership
Selling shares can be difficult
Have to pay dividends from profits

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3
Q

What is an AGM

A

Annual general meeting
PLCs require the directors to hold an AGM to inform shareholders on objectives and strategy for business

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4
Q

What are some not for profit organisations

A

Social enterprise
Charities

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5
Q

What is a social enterprise

A

Same as a corporate business but puts all profits in cause + growth

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6
Q

What are charities

A

Organisation that only uses donations to a cause

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7
Q

What Is social entrepreneurship

A

Targets a social issue with a solution

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8
Q

What are advantages of a public limited company

A

Likelier to take loans as banks can see
More likely to gain share capital
Can retain how many shares go into the market
Enables quicker growth

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9
Q

What are disadvantages of a public limited company

A

Can’t control who buys shares
People can see all data and accounts as it’s public
Have to warn the market

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10
Q

What is IPO

A

Initial public offering
Issuing shares to public

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11
Q

What impacts share price

A

Voting rights
Large investors don’t wanna invest in unethical operations
Timings of when they list on the market
Retail investors

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12
Q

Why do investors buy shares

A

Return on investment(Dividends)
Make a benefit when reselling shares
Pay capital gain tax
When business do well share value shared increases

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13
Q

State some points about facts

A

Shares in PLC have a minimum of 500000 share capital
Businesses only get share capital once
Share value is impacted on demand
If demand increases so do share prices

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14
Q

What are internal factors affecting share price

A

Decisions made by leader of business
Leaders attitude to risk
Financial performance,profit returns=dividends

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15
Q

What is market capitalisation

A

Value of the business determined by the price of its shares

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16
Q

Formula for market capitalisation

A

Share price x number of shares issued

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17
Q

What are some sources of finance

A

Owners capital
Crowdfunding
Bank loan
Owners capital

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18
Q

What is a overdraft

A

Short term emergency funds

19
Q

What is owners capital

A

Owners own savings that they might want to contribute

20
Q

What is crowdfunding

A

Take contributions from people online
Long term source of finance

21
Q

What is a bank loan

A

Bank decide rate of interest long term

22
Q

What s divorce of ownership

A

Happens when shareholders do not control day to day decisions made in the business

23
Q

Describe divorce of ownership

A

Majority of shareholders in PLCs don’t influence decisions at all
Delegation of responsibility to management ownership shares and decision shares
Make sure directors are working for best of the business and not for personal financial gain

24
Q

What is labour supply

A

How many people are available to work and skill sets of these people

25
Q

What is external environment

A

Business being able to be dynamic which means adapts and change to customer needs

26
Q

What are some political factor

A

Charge of taxation
Gross domestic profit-financial good produced in country each year
Lower taxes means more disposable income

27
Q

What is interest

A

The cost of borrowing and the reward of saving

28
Q

What is inflation

A

Increase in price of goods over time
If inflation is less that means people can spend less and save money
Inflation is a problem if people can’t afford it

29
Q

What are some seasonal demands

A

Fuel
Summer seasons
Religious festivals
Farming in seasons

30
Q

What does PESTLE stand for

A

Political
Economic
Social
Technological
Legal
Environmental

31
Q

Name the 4 stages of the economy

A

Boom
Downturn
Recession
Recovery

32
Q

Describe boom

A

High employment,demand,investment,confidence

33
Q

Describe downturn

A

Decreasing employment,demand,investment,confidence

34
Q

Describe the recession/slump

A

Low employment,demand,investment,confidence

35
Q

Describe recovery

A

Increasing employment,demand,investment,confidence

36
Q

Depending on where a business is on the economic cycle it will impact

A

Interest rates
Consumer income
Unemployment
Exchange rates

37
Q

What is corporation tax

A

Tax on profits

38
Q

What are factors that affect share value

A

Risks taken
New leadership
Actions of competitors

39
Q

What is liquidation

A

Act of turning assets into cash

40
Q

What is receivables

A

Money coming into the business

41
Q

What is payables

A

Money you owe

42
Q

What are financial objectives

A

To do with financial performance of business

43
Q

What are corporate objectives

A

This is to do with a business as a whole

44
Q

What is insolvency

A

Inability to pay debt

A Level Business (5 decks)

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