Topic One, Part 5 - Business Size Flashcards
What issue is associated with using employee number to determine business size?
large businesses will have automated machines
What factors can determine a business’ size?
Level of profits and assets
What issue is associated with using profit to determine the size?
- A small Jeweller has a high turnover
- Trading difficulties will reduce profit in short term
How can the stock market value determine a business’ size?
Share value x number of shares issued
What internal factors can affect the size of the business?
- Nature of the product
- Personal Preference of owner
What reasons would a business want to grow?
- Return on investment
- diversification
- Gain economies of scale
What is a merger?
Where two companies join together to form a larger business
What is a takeover?
Acquiring control of another company by buying its shares
What is the difference between a smooth takeover and a hostile one?
A resisted takeover is regarded as hostile
What is a joint venture?
A formal business arrangement between two (or more) businesses to work together on a project. Both parties invest in the project.
What is a joint venture different from a merger?
Two or more Businesses combine resources to complete a task
What number of employees is regarded as a small business?
Below 50
What number of employees is regarded as a large business?
Over 250
What external factor can affect the size of the business?
Market size
