Unit 1

Question 1

Mission statement

Answer 1

A qualitive statement of an organisations aims that uses language intended to motivate employees p

Question 2

Corporate bjectives

Answer 2

Goals of the whole organisation rather than different elements

Question 3

Why do business set objectives

Answer 3

Specific-easily and defined
Measurable-quantifiabel
Agreed-nanages and subordinates are involved in setting targeted
Realistic-achievable and not in conflict with other objectives
Time bound-based on an explicit timescale

Question 4

Examples of business objectives

Answer 4

Profit growth survival
Cash flow
Social and ethical objectives

Question 5

What is revenue also known as

Answer 5

Turnover or sales turnover

Question 6

What is the effect of changes in sale volume on total revenue

Answer 6

Selling price remains unchanged

Question 7

Importance of profit

Answer 7

Seen as a reward
Motivator
Measure of success

Question 8

Private sector organisations

Answer 8

Owned, financed and rub by private individuals
Includes non profit organisations like charities

Question 9

Public sector organisation

Answer 9

Own by government essential services or education

Question 10

Unlimited liability

Answer 10

Owners are liable for all debts that the business may incur

Question 11

Limited liability

Answer 11

Don’t have to pay for debt and the shareholders pay

Question 12

Ltd

Answer 12

Keep it’s affairs private
Owners can determine objectives without pressure of short term profit
They are funded by shares

Question 13

Soletrader advantages

Answer 13

Easy and cheap to set up
Few legal normalities
Owner takes all profit

Question 14

Disadvantages of soletrader

Answer 14

Unlimited liability
Limited capital for investment and expansion

Question 15

Advantages of private limited company

Answer 15

Limited liability
More privacy
More flexible

Question 16

Disadvantages of private limited company

Answer 16

Shares are less attractive as cannot be traded on the stock exchange and hence could be difficult to sell
If expansion needs finance more difficult to raise than for plc

Question 17

Advantages of public limited ckmpany

Answer 17

Limited liability
Gain positive publicity
Suppliers tend to be more willing to offer credit to plcs

Question 18

Disadvantages of plcs

Answer 18

Must publish a lot of financial info
Founders lose control of these shareholding falls below 51 percent

Question 19

Ordinary share capital

Answer 19

Money given to a company by shareholders in return for a share certificate that gives them part ownership of the company
No guarantee level or dividend

Question 20

Market capitalisation

Answer 20

The value of outstanding shares in a public limited company

Question 21

Shareholders function

Answer 21

Provide finance for business’s
Must have at least 51 percent of ordinary shares
Have a right to receive dividends

Question 22

Influences on share price and significance of share price changes

Answer 22

State of economy
Performance of company
Competition in the market

Question 23

PESTLE stand for

Answer 23

Political
Economic
Social
Technological
Legal
Environmental

Question 24

Factors influencing demand. For a product

Answer 24

Price of product
Tastes and fashion
Technology
Marketing and advertising
Seasonal factors

Question 25

Determinants of competitiveness and their impact on costs and demand

Answer 25

Investment in new equipment and technology
Financial planning and control
Quality procedures
Staff skills, education and training