Brainscape's Knowledge GenomeTM

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


See full index

Business > What Is A Business? > Flashcards

What Is A Business? Flashcards

1
Q

What is a business?

A

A business is an organisation that sells products or service to satisfy customer needs

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

Why do businesses exist?

A

Realisation of an idea by an entrepreneur with the aim of serving their products and services to customers to make a profit

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

What is a business objective?

A

A goal or an aim that a business wants to achieve

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

What does SMART stand for?

A

S= specific
M= measurable
A= achievable
R= realistic
T= time bound

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

What is the hierarchy of objectives?

A

Mission, corporate, functional, unit/team, individual

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

Why does a business set objectives?

A

Objectives show if a business is progressing in the right direction

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

What is profit?

A

Total revenue - total costs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

What is shrinkflation?

A

Where a manufacturer keeps the price the same but makes the product smaller

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What is growth?

A

Business want to grow to increase profit. They can grow organically or inorganically

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

What is organic growth?

A

Taking on more staff, opening more stores

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What is inorganic growth?

A

With help of another company e.g take over

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

What is survival?

A

During they first year they aim to reach levels of sales that allows a business to reach break-even point

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What is break-even point?

A

Not gaining profit but not losing profit

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What is cash flow?

A

To make sure that they have enough money to pay their day-to-day expenses

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What is social (CSR)?

A

Involves helping the environment, helping the homeless get jobs and fair wages

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What is ethical?

A

Moral principles behind human behaviour

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

What is the mission statement?

A

A formal phrase that sets out the aims, purposes and values of a business

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

What are the 4 functional areas of business?

A

Finance, operations, marketing and Human Resources

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

How to improve profit?

A

Reduce costs or increase revenue

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

What is total costs?

A

Fixed costs + variable costs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

What are fixed costs?

A

Costs that don’t vary with output

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

What is the fixed cost formula?

A

FC= TR-TVC-P

23
Q

What is variable costs?

A

Costs that do vary with level of output

24
Q

What is the variable cost formula?

A

TVC= TR-FC-P

25
Q

What is revenue?

A

Amount of money that is earned through the selling of goods and services

26
Q

What is the revenue formula?

A

Number of goods sold x selling price of good

27
Q

What is the sales revenue?

A

Money earned from sales

28
Q

What is the sales revenue formula?

A

SR=P+TVC+FC
Or
SR= P+TC

29
Q

What is a private sector?

A

these are organisations owned and operated by private individuals or shareholders

30
Q

What is a public sector?

A

these are organisations owned and controlled by the government and are therefore subject to government funding

31
Q

What is unlimited liability?

A

a situation in which the owners of a business are liable for all the debts that the business may incur

32
Q

What is limited liability?

A

Investors and owners private assets are not at risk if a company fails

33
Q

What is a sole trader?

A

a business owned by one person. May operate on own or may employ people.

34
Q

Advantages to sole traders

A

• Easy and cheap to set up
• Owners takes all the profit
• Few legal formalities
• Able to respond quicker to changes in circumstances
• Independence

35
Q

Disadvantages to sole traders

A

• Limited collateral to support applications for loans
• Difficulties when owner is ill or wants to go on holiday
• Limited capital for investment and expansion
• Unlimited liability - responsible for debts

36
Q

What is a private limited company?

A

A business that is owned by its shareholders, run by directors and where the liability of shareholders for the debts of the company is limited. Normally ran by families or small groups.

37
Q

Advantages to Private limited company

A

• More flexible
• More privacy
• Limited liability
• Separate legal identity
• Access to more capital

38
Q

Disadvantages to private limited company

A

• Shares can’t be traded on Stock Exchange and therefore can be difficult to sell
• If expansion needs finance, it’s more difficult to raise
• More legal formalities
• Higher set up costs

39
Q

What is a public limited company?

A

a company that has offered shares of stock to the general public

40
Q

Advantages to public limited company’s

A

• Limited liability
• Separate legal identity
• Easier to raise finance as it can trade on Stock Exchange
• Can gain positive publicity
• Suppliers tend to be more willing to offer credit to plcs

41
Q

Disadvantages to public limited companies

A

• Must publish financial information
• Greater scrutiny of activities
• Significant administrative expenses
• Pressure from investors result in short term financial results but not long term

42
Q

What are shares?

A

an individual part of the total issued share capital of a company

43
Q

What are voting rights?

A

the right of a shareholder of a corporation to vote on matters of corporate policy

44
Q

What are dividends?

A

reward paid to the shareholders for their investment in a company

45
Q

What is companies house?

A

official register of companies in UK

46
Q

What is separate legal entity?

A

they have their own legal identity and therefore can own property, enter into contracts and sue/be sued

47
Q

What is a non-for-profit organisation?

A

has social and environmental aims rather than the sole aim to make profit

48
Q

What is a social enterprise?

A

a business with a primarily purpose to achieve specific social objectives

49
Q

influences on business form?

A

• Finance
• Size of the business
• Amount of owners
• Location
• How much liability wanted
• Products/services being offered
• Objectives
• How the business is financed

50
Q

Reasons for choosing business forms

A

• Type of business
• Amount of risk (would choose limited liability for protection)

51
Q

Reasons for changing business forms

A

• For growth (family/friends to invest in business)
• For more profit
• For more finance
• To be limited liability (LTD)
• To be floating in the Stock Market (attracts investment from public) (PLC)

52
Q

What are shareholders?

A

own a share of the business

53
Q

What are ordinary shares?

A

Equal voting rights based on number of shares value

Business (1 decks)

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