Business Unit 2

Profits that the owners have decided to plough back into the business after they've paid themselves a dividend.

Businesses will need to take a loan or mortgage, this can be repaid with intrest.

Its much easier for a large firm to get a mortgage or loan. Banks are more willing to lend them money as there's less risk of them failing. Also have more assets.

This shows the revenues received by the business and its costs involved in generating that revenue.

Because it gives a snapshot of what the business owns, or is owned, at a particulr point in time.

A balance sheet shows how the business is being funded and how those funds are being used. Or the list of assets owned by the business and the list of liabilities. (What is owes to other organisations).

Tangible= Land, office, equipment, machinery, buildings and other items. The value of tangible assets is shown as their resale of theirb depreciated value. Intangible= Trademarks, long-term investments, parents, goodwill and even website domain names.

- Making higher prof8its. - Opening new markets at home or abroad. - Growth in business market share.

- A business will grow too survive. - A business will want to reduce the risk of failure.

Economy is not growing.

Starts to slow before recession.

Sell a different type of product.

Any costs you have.